What GOV.UK says counts as an allowable expense
GOV.UK describes allowable expenses as business running costs you can deduct from your turnover before paying Income Tax. It says you can only claim for costs related to business purchases, and gives categories with examples: office costs, travel costs, clothing expenses, staff costs, things bought to sell on, financial costs such as insurance or bank charges, costs of business premises, advertising or marketing, subscriptions, and training courses related to your business.
It also says allowable expenses do not include money taken from your business for personal use, and that for an item with mixed use you can claim only the business portion.
This is general information, not tax or legal advice. Your situation may differ, so check the linked GOV.UK pages (and HMRC if you are unsure) for the rules that apply to you.
The records GOV.UK says to keep
The expenses page itself says little about records and points to GOV.UK's business records guide. That guide says to keep records of all sales and income and all business expenses, and lists bank statements and chequebook stubs as proof. It says your records must be accurate and let you identify business transactions.
On timing, it says to keep records for at least 5 years after the 31 January submission deadline of the relevant tax year, or for 15 months after you send the return if you send it more than 4 years after the deadline.
Turning statement lines into categories
A bank statement shows what left your account, not why. Once the rows are in a spreadsheet you can add a category column that mirrors the headings you use for your own records, and a column for mixed-use items showing the business share you decide on. This is an organising aid only; it does not decide what is allowable.
A simple layout, with made-up figures, might look like this:
Date Description Amount Category Business %
2026-07-02 Printer paper -22.50 Office costs 100
2026-07-09 Mobile phone bill -35.00 Office costs 60
2026-07-15 Train ticket -48.00 Travel costs 100
2026-07-28 Bank charges -12.00 Financial costs 100You can then filter by category, total each one with a pivot table, and mark rows that still need a receipt or invoice. Transfers to yourself can be tagged so they are not mixed with business costs, which follows the GOV.UK point that personal drawings are not allowable expenses.
Checking your work
Compare the converted rows with the opening and closing balances on each statement before trusting the totals. Keep the original statements and receipts, since a spreadsheet is a working copy and nothing in the GOV.UK pages read for this article says it replaces them. If you use a tool such as PDFtoRow to convert statements, keep the PDFs too.
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Frequently Asked Questions
Business running costs you can deduct from turnover before paying Income Tax, limited to costs related to business purchases, with categories such as office, travel and subscriptions.
GOV.UK says that for mixed-use items you can claim only the business portion.
Its business records guide lists bank statements and chequebook stubs as proof of your records.
Primary Evidence & Official References
- Expenses if you are self-employed — gov.uk (Verified 2026-10-29). Official source documentation →
- Business records if you are self-employed: What records to keep — gov.uk (Verified 2026-10-29). Official source documentation →
- Business records if you are self-employed: How long to keep your records — gov.uk (Verified 2026-10-29). Official source documentation →