UK Self-Employed Deduction Wizard

ITTOIA 2005 s34 says a self-employed expense is only deductible if it was incurred wholly and exclusively for trade purposes. If there's any private element, the expense must be apportioned (e.g., a phone used 70% for business → claim 70%). Dual-purpose spending with no definite apportionment is fully disallowed — as in Mallalieu v Drummond (1983), where a barrister's court clothing was refused because it provided private benefit (warmth, decency) as well as trade use.

Only when your actual allowable expenses are below £1,000. If gross trading income is over £1,000, you can elect to deduct a flat £1,000 instead of keeping expense records. Above £1,000 of actual expenses, claim actual. The wizard shows both numbers side by side so you can see which wins.

Only for uniforms, protective clothing (hi-vis, boots, gloves), and costumes used by actors/performers. Everyday clothing — suits, jeans, plain T-shirts — is not deductible even if you only wear it for work (Mallalieu v Drummond 1983). A branded polo shirt with a logo generally IS allowable; the same polo shirt unbranded is not.

Three big changes continuing into 2025-26: (1) Cash basis is now the DEFAULT accounting method — no opt-in required, £150k turnover cap abolished, £500 interest restriction removed, loss relief restrictions lifted. (2) Class 2 NIC is abolished for most traders (voluntary only for low-profit top-ups). (3) Class 4 NIC main rate is 6% (down from 9% → 8% → 6%). Also: training costs to expand skills are now allowed (BIM35660, March 2024), reversing the old Dass position.

No — ITTOIA 2005 s45 disallows client entertainment 100%, whether it's lunch, drinks, tickets, or gifts that include food/drink/tobacco/vouchers. The £150/head employee-event exemption does NOT apply to sole traders entertaining their own business or clients. Staff entertainment for your own employees IS allowable.

From 6 April 2026, MTD for ITSA applies to self-employed and landlords with combined gross income over £50,000. You'll need MTD-compliant software, digital records, and quarterly updates + a final declaration — replacing the annual SA return for those in scope. Thresholds drop to £30k from April 2027 and £20k from April 2028. This wizard flags the £50k threshold in your result if you're over it.

Assets like tools, laptops, cameras, and machinery are usually claimed via the Annual Investment Allowance (AIA) — 100% write-off in the year of purchase, up to £1 million per year (permanent from April 2023). Cars are different: you use Writing Down Allowances at 18% (≤50g/km CO2) or 6% (>50g/km), or 100% First Year Allowance for new electric cars (extended to 31 March 2026). Under cash basis, non-car asset purchases are deducted when you pay for them.