If you’re self-employed, your business will have various running costs. You can deduct some of these costs to work out your taxable profit as long as they’re allowable expenses.Example: Your turnover is £40,000, and you claim £10,000 in allowable expenses. You only pay tax on the remaining £30,000 – known as your taxable profit.Allowable expenses do not include money taken from your business to pay for private purchases.Costs you can claim as allowable expensesThese include:office costs, for example stationery or phone billstravel costs, for example fuel, parking, train or bus faresclothing expenses, for example uniformsstaff costs, for example salaries or subcontractor coststhings you buy to sell on, for example stock or raw materialsfinancial costs, for example insurance or bank chargescosts of your business premises, for example heating, lighting, business ratesadvertising or marketing, for example website coststraining courses related to your business, for example refresher coursesYou cannot claim expenses if you use your £1,000 tax-free ‘trading allowance’.Contact the Self Assessment helpline if you’re not sure whether a business cost is an allowable expense.Costs you can claim as capital allowancesIf you use traditional accounting, claim capital allowances when you buy something you keep to use in your business, for example:equipmentmachinerybusiness vehicles, for example cars, vans, lorriesYou cannot claim capital allowances if you use your £1,000 tax-free ‘trading allowance’.If you use cash basisIf you use cash basis accounting and buy a car for your business, you can claim this as a capital allowance. However, all other items you buy and keep for your business should be claimed as allowable expenses in the normal way.If you use something for both business and personal reasonsYou can only claim allowable expenses for the business costs.Example: Your mobile phone bills for the year total £200. Of this, you spend £130 on personal calls and £70 on business.You can claim for £70 of business expenses.If you work from homeYou may be able to claim a proportion of your costs for things like:heatingelectricityCouncil Taxmortgage interest or rentinternet and telephone useYou’ll need to find a reasonable method of dividing your costs, for example by the number of rooms you use for business or the amount of time you spend working from home.Example: You have 4 rooms in your home, one of which you use only as an office.Your electricity bill for the year is £400. Assuming all the rooms in your home use equal amounts of electricity, you can claim £100 as allowable expenses (£400 divided by 4).If you worked only one day a week from home, you could claim £14.29 as allowable expenses (£100 divided by 7).Simplified expensesYou can avoid using complex calculations to work out your business expenses by using simplified expenses. Simplified expenses are flat rates that can be used for:vehiclesworking from homeliving on your business premises