Flat rate expenses

Flat rate expenses (also known as ‘simplified expenses’) are flat rates that you can use to reduce your self-employment taxes. You can use these flat rates instead of working out your actual business costs. That said, this method might not suit your circumstances. 

Who can use flat rate expenses? 

You can use flat rate expenses if you are:

• Self-employed or are a sole trader
• A business partnership that doesn’t have a company as a partner

This type of expense cannot be used by limited companies or business partnerships involving a limited company.

What can I claim flat rate expenses for?

You can claim flat rate expenses for any of the following:

1. Working from home: You can claim between £10 and £26 per month, depending on how much time you spend working from home.
2. Business costs for some vehicles: If you drive to see your clients or visit a worksite, you can claim between 25p and 45p per mile, depending on how many miles you drive and what kind of vehicle you use (even bikes are eligible).
3. Living at your business premises: You can claim between £350 to £650 per month, depending on how many members of your family live there.

All other business expenses can be claimed by working out the actual costs.

How do I claim?

You can claim flat rate expenses through your Self-Assessment tax return. It’s important to remember to keep records of your business miles for vehicles, hours you work at home and how many people live at your business premises over the year. When completing your tax return, you can work out the amount of flat rate expenses you can claim. You can then include these amounts in the total for your expenses. 

Remember to file your Self Assessment by 31st January the year after the tax year you’re paying for. For example, if you’re paying your 2023/2024 tax return, this should be paid by 31st January 2025.