The Most Common Allowable Costs Sole Traders Forget
If you’re a sole trader, there’s a good chance you’re paying more tax than you need to.
Not because you’re doing anything wrong, but because expense tracking is one of those jobs that sits at the bottom of the list until it becomes urgent. Receipts go missing, purchases get mixed with personal spending, and by the time you’re thinking about your tax return, you’re trying to remember what that Amazon order in June was actually for.
This article is a plain-English guide to the expense categories sole traders most commonly miss, what “allowable” really means, and how to build a simple system so you’re not leaving money on the table.
Important note: This is general information, not personal tax advice. Rules vary by situation. If you’re unsure, speak to a professional, just like Zenith Book-Keeping.
Why missed expenses matter (even if they’re “small”)
Every legitimate business expense you record reduces your taxable profit. Miss enough of them, and you can end up:
- paying more tax than necessary
- losing clarity on whether you’re truly profitable
- feeling cash-tight because you’re not tracking where money is going
- scrambling at year-end to rebuild records
The goal isn’t to claim everything under the sun. The goal is to claim what’s legitimate, evidence-based, and clearly business-related.
The simple rule: “wholly and exclusively” for business
In plain English, an expense is usually allowable if it’s:
- for your business, not personal life
- necessary to do your work (or to run the business)
- supported by records (receipts, invoices, mileage logs, statements)
Where it gets tricky is mixed-use items (phone, internet, home office). Those can often be claimed in part, but you need a sensible method and consistent records.
12 expense areas sole traders commonly miss
1) Software subscriptions and online tools
This is one of the biggest “silent leaks” in micro businesses.
Examples:
- accounting/bookkeeping software
- invoicing tools
- design tools
- scheduling software
- cloud storage
- website hosting and domains
- email marketing platforms
Tip: do a quarterly “subscription sweep” and cancel what you don’t use.
2) Bank charges, card fees, and payment processing fees
These often get ignored because they’re small and frequent.
Examples:
- business bank account fees
- card machine fees
- Stripe/PayPal processing fees
- foreign transaction fees
3) Professional fees and memberships
If it supports your work or keeps you compliant, it’s often relevant.
Examples:
- bookkeeping/accountancy fees
- legal advice
- professional body memberships
- trade association fees
4) Training and CPD (that relates to your current business)
Training is a common missed area — and also one that needs care.
Examples:
- courses that improve your current skills
- workshops and conferences
- industry certifications (where applicable)
Keep evidence: invoice + course outline + how it relates to your business.
5) Marketing and advertising
Sole traders often remember big ad spends but miss the smaller items.
Examples:
- Facebook/Instagram/Google ads
- Canva templates
- printing (flyers, business cards)
- networking event tickets
- sponsorships
6) Travel and mileage (and the records to prove it)
This is a huge one.
Examples:
- business mileage to client sites
- parking for business travel
- train fares for business meetings
Tip: keep a simple mileage log (date, start/end, purpose, miles). Consistency matters more than complexity.
7) Use of the home as office
If you work from home, you may be able to claim a portion of household costs.
Examples:
- electricity/gas
- broadband
- rent (in some cases) or mortgage interest element (not capital)
- council tax (in some cases)
Because this is mixed-use, you need a reasonable method. Zenith can help you choose the simplest compliant approach.
8) Phone and internet (business portion)
Many sole traders pay for these personally and forget to claim the business element.
Tip: if you use one phone for everything, claim a sensible business percentage and keep it consistent.
9) Equipment, tools, and small consumables
People often remember the big purchases and miss the everyday items.
Examples:
- tools and protective equipment
- printer ink and paper
- stationery
- small replacement parts
10) Insurance
Often paid annually and forgotten.
Examples:
- public liability
- professional indemnity
- Business Contents Insurance
11) Vehicle costs (where relevant)
This depends on how you operate and what method you use (mileage vs actual costs). It’s an area where getting advice is worth it.
Examples:
- fuel
- servicing
- insurance
- repairs
12) Bad debts and unpaid invoices (where applicable)
If you’ve invoiced and genuinely won’t be paid, there may be a way to reflect that properly — but it depends on your accounting basis and records.
This is a great example of where a bookkeeper helps you avoid mistakes.
A quick self-check: are you missing expenses?
Ask yourself:
- Do I have business expenses on my personal card?
- Do I have subscriptions I haven’t reviewed in 6+ months?
- Do I keep a mileage log — or do I guess at year-end?
- Do I have a folder (digital or physical) for receipts?
- Can I explain each business expense if asked?
If any of those are a “no”, you’re not alone — and it’s fixable.
The easiest system for capturing expenses (so you don’t miss them)
Here’s a simple approach that works for most sole traders:
- Separate spending: use a dedicated business account/card where possible.
- Capture receipts immediately: snap a photo and store it in one place.
- Weekly 10-minute tidy: check transactions, label/categorise, flag anything unclear.
- Monthly review: total income, total expenses, estimated profit, tax set-aside.
The system matters more than the tool. But the right tool makes the system easier.
How Zenith Book Keeping helps you claim confidently (and stay compliant)
Zenith Book Keeping helps sole traders and micro businesses:
- Set up a simple record-keeping system that fits how you actually work
- categorise expenses correctly so you can see where money goes
- reduce the risk of missing allowable costs (or claiming something incorrectly)
- Get the best from your bookkeeping software — or choose the right option if you don’t use one yet
- keep you up to date so tax time isn’t a scramble
Takeaways (save these)
- Missed expenses = higher tax and less clarity
- Focus on expenses that are clearly business-related and backed by records
- The most commonly missed areas are subscriptions, fees, mileage, home working, phone/internet, and small consumables
- A simple weekly and monthly routine prevents year-end panic
- If you want it done properly (and simply), a bookkeeper is a shortcut to confidence
Ready to stop leaving money on the table in early 2026?
If you’re a sole trader and you want to feel confident that you’re claiming what you should — without crossing any lines — now is a great time to get your bookkeeping system sorted.
Zenith Book Keeping is running a special early-2026 offer with a discount for new clients who sign up in the early part of 2026.
Take a look at Zenith’s current offer and speak to the team about getting your records clean, simple, and stress-free.
