Can I claim my rent, lunch and clothes as business expenses?
Complete guide for Self-Employed individuals, CIS Subcontractors and Limited Company Directors in the UK
One of the most common questions asked by Romanians working in the UK as self-employed individuals, CIS subcontractors or Limited Company directors is:
“If I use something for work, can I claim it as a business expense?”
At first glance, the answer seems simple. If you need something in order to work, it should be deductible, right?
In reality, HMRC rules are much stricter. Many expenses that appear to be “business-related” at first can actually be considered personal. If they are incorrectly included in the accounts, they can lead to additional tax, interest, penalties or even an HMRC enquiry.
In this article, we look at three of the most discussed expense categories:
• rent or household costs
• lunch and food during the working day
• clothing, uniforms and work equipment
We explain what can be deducted, what cannot be deducted and where the biggest risks appear for Self Assessment, CIS and Limited Companies.
The basic rule: “Wholly and Exclusively”
The main rule used by HMRC is that an expense must be incurred:
“wholly and exclusively for the purposes of the trade”
In simple terms:
The expense must be incurred entirely and exclusively for the business activity.
If there is an important personal purpose, HMRC may refuse the deduction.
However, there are situations where an expense has both personal use and business use, and the business part can be calculated reasonably.
For example, if you work from home, you cannot deduct all of your rent, but you may be able to deduct a reasonable part of certain household costs.
The practical question you should ask yourself is:
“Would I have incurred this cost if I did not have the business?”
If the answer is “yes”, you need to analyse very carefully whether there is truly a deductible business element.
1. Can I claim my rent as a business expense?
The short answer is:
Yes, but only partially and only if you genuinely work from home for your business.
You cannot put the full rent of your home through the company or Self Assessment just because you are self-employed or a Limited Company director.
HMRC accepts, in certain circumstances, a reasonable proportion of household costs when the home is also used for business activity.
If you are Self-Employed or a Sole Trader
If you are self-employed, a sole trader or a CIS subcontractor and you work from home for your business, you can calculate part of your household costs as a business expense.
Examples of business activities carried out from home include:
• issuing invoices
• keeping job records
• replying to client emails and messages
• preparing quotes
• making appointments
• doing bookkeeping
• using a room as an office or administration space
• storing documents, equipment or small materials
Costs that may be considered for a partial deduction include:
• rent
• electricity
• gas
• Council Tax
• water
• internet
• telephone
• home insurance, if there is a relevant business element
• certain repairs, if they relate to the area used for business
Important: you must use a reasonable calculation method.
Practical example: Self-Employed person working from home
Let’s assume you live in a house with 5 rooms and use one room as an office for your business activity.
If one room out of 5 is used for business, the basic percentage would be:
1 room ÷ 5 rooms = 20%
But you also need to consider time.
If that room is used as an office only 50% of the time, the deductible percentage may be:
20% × 50% = 10%
If the electricity bill is £200 per month, the business part may be:
£200 × 10% = £20 deductible
The same logic can be applied to other relevant costs.
Be careful with exclusive business use of a room
If you use one room exclusively for business, with no personal use at all, other tax or practical implications can arise.
These may include:
• possible Capital Gains Tax issues when selling the property
• possible Business Rates questions
• possible issues with the tenancy agreement
• possible home insurance problems
• possible restrictions from the landlord or mortgage provider
For this reason, in practice, many taxpayers use the room personally to some extent as well, for example as an office during the day and a normal room at other times.
Simplified Expenses for Self-Employed individuals
For self-employed individuals, HMRC also allows a simplified method for working from home.
This is useful if you do not want to calculate the exact business proportion of bills.
HMRC’s flat rates for working from home are:
• if you work between 25 and 50 hours per month from home, you can deduct £10 per month
• if you work between 51 and 100 hours per month from home, you can deduct £18 per month
• if you work 101 hours or more per month from home, you can deduct £26 per month
This method applies to self-employed individuals, sole traders and partnerships.
Important: this simplified amount does not include telephone and internet costs. For those, you can calculate the business proportion separately if there is genuine business use.
If you have a Limited Company
Here, the rules are different.
A Limited Company director is not treated in the same way as a sole trader. The company is a separate legal entity, and the director is normally an employee or office holder of the company.
Therefore, it is not correct to simply say:
“I have a Limited Company, so I’ll put part of my home rent through the company.”
For a Limited Company, there are generally three options.
Option 1: Homeworking Allowance
The company can pay the director or employee a fixed amount for regular homeworking.
The standard rate is:
£6 per week
or
£26 per month for monthly paid employees
This amount can be paid without the director or employee justifying every bill, provided there is a genuine homeworking arrangement and the amount covers reasonable additional costs.
For many small companies, this is the simplest and cleanest option.
Important: do not confuse a payment made by the company to the director or employee with a personal tax relief claim made directly to HMRC. The rules for employee homeworking claims have changed, and from 2026/27 eligibility must be reviewed carefully.
For a small company, the cleaner option is usually for the company to pay a correct, documented and permitted amount directly, if there is a genuine homeworking arrangement.
Option 2: Actual additional costs
The company can reimburse actual additional costs incurred from working at home, but there must be clear evidence.
For example, the following may be considered:
• additional electricity costs
• additional heating costs
• additional costs directly connected to the business activity
Important: it is not enough to say:
“I pay rent, so the company reimburses my rent.”
You need to demonstrate what additional cost arose because of the company.
Option 3: Rental agreement between the director and the company
Another option is for the director to rent part of the home to the company through a formal agreement.
This may allow the company to deduct more than £6 per week, but it comes with more risks and obligations.
The following must be considered:
• there should be a rental agreement or licence agreement
• the rent must be reasonable and justified
• the director may need to declare the rental income personally
• deductible costs against that income must be reviewed
• Capital Gains Tax implications may arise if part of the home is used exclusively for business
• there may be mortgage, lease, landlord, insurance or Business Rates implications
For small companies, this option should be used carefully and only after professional review.
2. Can I claim my lunch as a business expense?
This is one of the biggest areas of confusion.
The short answer is:
In most cases, no.
Daily lunch is usually considered a personal expense.
Example: CIS subcontractor on site
You are a CIS subcontractor working on a construction site.
At lunch, you go to Tesco, Lidl, Greggs or McDonald’s and buy:
• sandwich
• coffee
• water
• meal deal
• hot food
• snacks
In most cases, these costs are not deductible.
Why?
Because HMRC considers that you need to eat whether you are working or not. Daily food is a normal personal need, not an expense incurred exclusively for business.
“But I am at work, not at home”
This is the most common argument.
The problem is that eating during working hours does not automatically turn food into a business expense.
If you go every day to the same area, the same site, the same route or the same type of normal work, HMRC may consider lunch to be an ordinary personal expense.
When can food be deductible for Self-Employed individuals?
Food can be deductible in certain business travel situations, especially where there is genuine travel for business purposes.
Examples include:
• travelling to another town or city for a job
• staying overnight for work
• attending a conference or training directly related to your business
• making a temporary journey that is not part of your normal routine
• meal costs connected with accommodation or business travel
Example:
You live in London and have a 3-day job in Manchester. You stay in a hotel and buy food during the trip.
In this situation, reasonable meal costs may be justified as part of the business travel.
For a Limited Company: can the director claim meals?
Yes, but not automatically.
A Limited Company director can be treated as an employee of the company. If the director travels for business purposes, the company may reimburse reasonable travel and subsistence costs, including food, in certain circumstances.
But there must be genuine business travel.
Acceptable examples include:
• the director goes to a client meeting in another city
• the director attends a business event
• the director works temporarily at a different location
• the director stays overnight for company business
Risky examples include:
• the director buys lunch every day near the usual office
• the director uses the company card for coffee and food every day
• the director pays for family meals from the company account
• the director records supermarket purchases as business expenses without clear explanation
If the meal does not meet the rules, it may become a personal expense, Director’s Loan, salary, dividend or Benefit in Kind.
What about meals with clients?
This is another trap.
Meals with clients are, in many cases, treated as business entertainment.
Even if the meeting is real and you discuss business, the cost of the meal with the client is usually not tax-deductible.
In the accounts, it may be recorded as business entertaining, but for tax purposes it may be added back and not reduce taxable profit.
Example:
You have a meeting with a client and pay £180 for the meal at a restaurant.
It may be a genuine commercial business cost, but that does not automatically mean it is tax-deductible.
3. Can I claim clothes as a business expense?
The short answer is:
Ordinary clothing is not deductible, even if you only wear it for work.
HMRC distinguishes between:
• ordinary clothing
• uniforms
• protective equipment
• special costumes for certain professions
What is not deductible?
In general, you cannot deduct:
• jeans
• normal T-shirts
• hoodies
• trainers
• ordinary jackets
• normal trousers
• shirts
• business suits
• coats
• smart casual clothing
This applies even if you say:
“I only wear them for work.”
The reason is simple: these clothes can also be worn in private life. They have a dual purpose: business and personal.
The classic example: the business suit
A consultant, accountant, estate agent or director may say:
“I need a suit for client meetings.”
However, an ordinary suit is not deductible because it can also be worn outside work.
Even if a professional image is important for the business, HMRC does not treat an ordinary suit as a uniform or protective equipment.
What clothing can be deductible?
In general, certain clear categories of clothing or equipment may be deductible.
1. Uniforms
Examples:
• T-shirts with the company logo
• jackets with the company logo
• uniforms specific to an occupation
• clothing that clearly identifies the professional role
To be easier to justify, the logo should be visible and permanent, not just a small or removable label.
2. Protective equipment
Examples:
• safety boots
• helmet
• Hi-Vis vest
• protective gloves
• safety glasses
• knee pads
• overalls
• safety equipment required on site
These are usually deductible because they are required for workplace safety and are not ordinary everyday clothes.
3. Special costumes
For certain professions, such as actors, entertainers or performers, special costumes may be deductible if used for professional activity.
Practical example: what HMRC may accept and what it may not
Examples that may be accepted:
• safety boots: £120
• safety helmet: £40
• Hi-Vis vest: £15
• protective gloves: £20
Potentially deductible total: £195
Risky or non-allowable examples:
• jeans: £80
• ordinary hoodie: £60
• trainers: £100
• ordinary jacket: £120
Deductible total: probably £0
Self-Employed vs Limited Company: important differences
The rules are not identical for Self-Employed individuals and Limited Companies.
For Self-Employed / Sole Trader, home rent may be partially deductible if you work from home and use a reasonable method.
For Limited Company, rent is not simply put through the company. Usually, you use the Homeworking Allowance of £6 per week, actual additional costs or a formal agreement between the director and the company.
For Self-Employed individuals, Simplified Expenses can be used for working from home:
• £10 per month for 25–50 hours worked from home
• £18 per month for 51–100 hours worked from home
• £26 per month for 101+ hours worked from home
For Limited Companies, these Simplified Expenses do not apply in the same form.
For Homeworking Allowance, the rule is:
• for Self-Employed individuals, it does not apply in the same form; they use Simplified Expenses or actual costs
• for Limited Companies, the company can pay £6 per week or £26 per month to employees/directors who regularly work from home
For daily lunch, the general rule is simple:
• for Self-Employed individuals, it is usually not deductible
• for Limited Companies, it is usually not deductible if it is ordinary daily lunch
For food during travel, the treatment can be different:
• for Self-Employed individuals, it may be deductible in certain genuine business travel situations
• for Limited Companies, it may be reimbursed in certain travel and subsistence situations
For ordinary clothing, the rule is the same:
• Self-Employed: no
• Limited Company: no
For uniforms or PPE, the rule is usually favourable:
• Self-Employed: yes, if it is for business
• Limited Company: yes, if it is for business and justified
For meals with clients, be careful:
• for Self-Employed individuals, they are usually business entertaining and not tax-deductible
• for Limited Companies, they are usually business entertaining and not tax-deductible
Important note: tax treatment can differ depending on legal structure: Self-Employed / Sole Trader, Partnership or Limited Company.
An expense allowed in one situation may have a different tax treatment in another structure, especially where VAT, Benefit in Kind, Director’s Loan Account, payroll or Corporation Tax rules are involved.
What happens if you pay personal expenses with the company card?
For a Limited Company, this is a very important issue.
If you use the company card for personal expenses, those amounts do not automatically become business expenses.
Risky personal expenses include:
• personal food
• supermarket shopping
• personal clothes
• holidays
• family meals
• personal rent without justification
• personal subscriptions
These amounts may be treated as:
• Director’s Loan
• salary
• dividend
• Benefit in Kind
• non-deductible expense
• amount to be reimbursed to the company
If the Director’s Loan Account becomes overdrawn and is not repaid on time, additional tax consequences may arise for both the company and the director.
What does HMRC check during an enquiry?
During an enquiry, HMRC may request documents and explanations for the expenses included.
HMRC may ask for:
• invoices
• receipts
• bank statements
• explanations for each expense
• calculation method for home use
• evidence that the travel was for business
• contracts
• emails
• diaries
• photos of the equipment
• documents showing that the uniform or PPE was necessary
HMRC does not only check whether you have a receipt. It also checks the purpose of the expense.
A receipt from Tesco does not automatically prove that a meal is deductible.
An invoice for clothes does not automatically prove that the clothes are uniforms.
A payment to the landlord does not automatically prove that rent is a business expense.
How long should records be kept?
If you are self-employed, you must keep records for at least 5 years after the relevant Self Assessment filing deadline.
If you have a Limited Company, the company must generally keep accounting records for 6 years from the end of the financial year they relate to.
Practical recommendation:
• keep invoices digitally
• photograph receipts immediately
• attach documents in your accounting software
• note the purpose of the expense
• avoid mixed personal/business payments
• use a separate account for business
What about VAT?
If you are VAT registered, the rule becomes even more sensitive.
You cannot reclaim VAT just because you paid for something with the company card.
To reclaim VAT, you need:
• a valid VAT invoice
• a business expense
• a clear link to taxable activity
• the correct proportion if there is mixed use
Practical examples:
VAT on PPE used for business
May be recoverable, if you have a valid invoice.
VAT on ordinary clothing
Generally, no.
VAT on personal lunch
Generally, no.
VAT on business entertainment
Usually very risky and often blocked.
If an expense is personal or non-deductible, that does not mean you can recover the related VAT.
The most common mistakes made by Romanians in the UK
Mistake 1: Putting all supermarket shopping through the business
This is one of the fastest ways to attract questions from HMRC.
If bank statements show frequent payments at Tesco, Lidl, Asda, Sainsbury’s or Costco, HMRC may ask what those purchases have to do with the business.
Mistake 2: Deducting the full rent of the home
Working from home does not mean the whole home becomes a business expense.
A reasonable proportion must be calculated.
Mistake 3: Treating ordinary clothes as uniform
An ordinary hoodie does not become a uniform just because you wear it on site.
A pair of jeans does not become protective equipment just because you wear it at work.
Mistake 4: Using the company card like a personal card
For a Limited Company, the company is separate from the director.
Company money is not automatically the director’s money.
Mistake 5: Lack of explanations
Even if an expense is valid, lack of documents and explanations can make it difficult to defend.
It is not enough to have a photo of a receipt. You must be able to explain why that expense was necessary for the business.
Quick guide: deductible or not?
Home rent
May be partially deductible, but only the reasonable business part.
Full home rent
Generally, no. Too much risk if you live there.
Electricity and gas
May be partially deductible if you work from home and calculate the business proportion correctly.
Internet
May be partially deductible, only for the business proportion.
Mobile phone
May be partially or fully deductible, depending on use and structure.
Daily Tesco lunch
Usually not deductible. It is considered a personal expense.
Food during overnight travel
May sometimes be deductible, if it is genuine business travel.
Daily coffee
Usually not deductible. High risk if it is a personal routine.
Meal with a client
Usually not tax-deductible because it falls under business entertainment.
Safety boots
Usually yes. They are treated as PPE.
Helmet and Hi-Vis vest
Usually yes. They are protective equipment.
Jeans and ordinary hoodie
No. They are ordinary clothing.
T-shirt with permanent logo
Usually yes, if it is a real uniform.
Business suit
No, even if you wear it to meetings.
Laptop for business
Yes, but personal use must be considered.
Accounting software
Yes, if used for business.
Accountancy fees
Yes, if they are for business.
Mileage with personal car
Yes, for business miles.
For cars and vans, the HMRC rate for 2026/27 is:
• 55p per mile for the first 10,000 business miles
• 25p per mile after 10,000 business miles
Company car
It depends. The rules are different and may include Benefit in Kind, fuel benefit and advisory fuel rates.
Note: this quick guide is indicative only. An expense may have a different treatment depending on legal structure, personal use, documents, VAT, payroll, Benefit in Kind or Director’s Loan Account.
Frequently Asked Questions
Can I claim internet as an expense?
Yes, but usually only partially if the internet is also used personally.
If 60% of use is personal and 40% is business, only the business part should be included.
For a Limited Company, you need to consider whether the bill is in the company name or personal name and what the real use is.
Can I claim my mobile phone as an expense?
Yes, but it depends on the situation.
If the phone is used exclusively for business, the position is simpler.
If it is also used personally, a reasonable split must be made.
For a Limited Company, phone contracts can have different treatments depending on who holds the contract and how many phones are provided.
Can I put daily coffee through the business?
Generally, no.
Daily coffee bought on the way to work or during a break is usually a personal expense.
There may be different treatment for coffee/tea provided to employees in the office or for certain business meeting situations, but personal daily coffee is very risky.
Can I claim work clothes if they get dirty on site?
Not automatically.
If they are ordinary clothes, such as jeans, T-shirts or hoodies, they remain ordinary clothing.
If they are protective equipment or clearly identifiable uniform, they may be deductible.
Can I put gym membership through the company?
Usually, no.
Even if your health helps you work better, a gym membership has a clear personal benefit.
In some special situations, there may be employee schemes or taxable benefits, but for most contractors and directors of small companies, gym membership is a personal expense or a Benefit in Kind.
Can I claim my personal car for business?
Yes, you can deduct costs related to business use, but not automatically all car costs.
For Self-Employed / Sole Trader, you can use either the actual cost method with a business proportion or the mileage method.
For the 2026/27 tax year, the HMRC rate for cars and vans is:
• 55p per mile for the first 10,000 business miles
• 25p per mile after 10,000 business miles
For motorcycles, the rate is:
• 24p per mile
For bicycles, the rate is:
• 20p per mile
Important: you cannot use simplified mileage for a vehicle for which you have already claimed capital allowances or for which you have already included actual costs in the profit calculation.
You must choose the correct method and apply it consistently.
For a Limited Company, if the director or employee uses their personal car for business journeys, the company can reimburse mileage allowance at HMRC-approved rates.
If we are talking about a company car, the rules are different. In that case, you need to consider:
• Benefit in Kind
• fuel benefit
• P11D
• payroll
• advisory fuel rates
• personal use
• type of car
• CO2 emissions
• whether the car is electric, hybrid or petrol/diesel
Do not confuse the 55p per mile rate for a personal car with the rules for company cars.
Simple test before claiming an expense
Before including an expense in your accounts, ask yourself:
• Is the expense for business?
• Is there also a personal benefit?
• Can I clearly separate the business part?
• Do I have an invoice or receipt?
• Can I explain the expense if HMRC asks?
• Was it paid from the correct account?
• Has it been treated correctly for VAT?
• Has it been treated correctly for the director, payroll or Benefit in Kind?
• Have I applied the right rule for Self-Employed or Limited Company?
• Have I kept enough documents to support the tax position?
If you cannot answer these questions clearly, the expense should be checked before being included.
Conclusion
Rent, food and clothing are three of the most common areas where taxpayers make mistakes.
Rent may be partially deductible if you work from home, but it must be calculated reasonably. For Self-Employed individuals, actual costs or Simplified Expenses may be used. For a Limited Company, the simplest option is usually the £6 per week Homeworking Allowance, although other options may exist if properly documented.
Lunch is, in most cases, a personal expense. It may be deductible only in certain business travel situations, not for ordinary daily lunch.
Ordinary clothes are not deductible, even if you wear them at work. Uniforms, clothing with a visible logo and protective equipment may be deductible if required for your activity.
Your personal car can be reimbursed for business miles, but the correct rules must be used. For 2026/27, cars and vans have a rate of 55p per mile for the first 10,000 business miles, but this must not be confused with company car rules.
The basic rule remains simple:
Not every expense paid during work is automatically a business expense.
If you are not sure, it is better to check before claiming it than to explain it later in front of HMRC.
Do you have expenses and are unsure whether they are deductible?
DCTaxAgent Ltd can help you check expenses correctly, avoid common mistakes and organise your accounts in a clear and safe way.
Services for:
• Self-Employed
• CIS Contractors
• Limited Companies
• Landlords
• Start-Ups
• Small Businesses
• Directors
DCTaxAgent Ltd
Accounting | Tax | Advisory
Phone / WhatsApp: 07587 532646
Email: contact@dctaxagent.co.uk
Website: www.dctaxagent.co.uk
Disclaimer
This article provides general information only and does not represent personalised tax advice. Tax treatment may depend on the exact circumstances of each person or company.