One of the easiest ways to end up paying too much tax is by missing legitimate business expenses.

Whether you're a coach, consultant, freelancer or online service provider, every allowable expense you claim reduces your taxable profit. Yet many business owners either don't claim everything they're entitled to or avoid claiming expenses altogether because they're worried about getting it wrong.

If that sounds familiar, don't worry.

In this guide, we'll walk through the most common business expenses for online business owners and explain what you need to know to stay on the right side of HMRC.

What Is a Business Expense?

A business expense is a cost you incur wholly and exclusively for your business.

In simple terms, if the expense is necessary for running your business, there's a good chance it may be allowable for tax purposes. For example:

✅ Paying for software to host client meetings

✅ Your business insurance

✅ Website hosting costs

✅ Professional accountancy fees

❌ Your weekly supermarket shop

❌ Family holidays

❌ Personal subscriptions unrelated to your business

The key is being able to demonstrate that the expense relates to your business activities.

Why Business Expenses Matter

Business owners are taxed on their profits, not their turnover. For example:

• Business income: £60,000
• Allowable expenses: £15,000
• Taxable profit: £45,000

The more legitimate business expenses you record, the more accurately your profit is calculated.

Claiming allowable expenses is not "dodging tax".

It's simply ensuring you're not paying more than you legally owe.

Common Expenses Coaches and Consultants Can Usually Claim

Software

Many online businesses rely heavily on software. Examples include:

• Zoom
• Microsoft 365
• Google Workspace
• Calendly
• Canva Pro
• Accounting software
• CRM systems
• Cloud storage services

If the software is used for business purposes, the cost is typically allowable.

Website Costs

Your website is often one of your biggest business assets. Allowable costs may include:

• Website design
• Hosting
• Domain registration
• Maintenance fees
• Website plugins
• SEO tools

If your website helps attract and serve clients, these costs are generally part of running your business.

Marketing and Advertising

Spending money to attract clients is a normal business expense. Examples include:

• Facebook advertising
• Instagram advertising
• LinkedIn advertising
• Google Ads
• Graphic design
• Printed marketing materials
• Email marketing platforms

Training and Professional Development

In many cases, training that helps you maintain or improve existing business skills may be allowable. Examples might include:

• Industry conferences
• CPD courses
• Professional memberships
• Technical training related to your services

However, training that gives you an entirely new qualification or enables you to start a different business may not qualify. This is an area where it's worth seeking advice if you're unsure.

Insurance

Common allowable policies include:

• Professional indemnity insurance
• Public liability insurance
• Cyber insurance
• Business equipment insurance

These costs are incurred to protect your business, making them a normal business expense.

Accountancy and Professional Fees

Good news, the cost of getting professional support is usually allowable. This can include:

• Accounting fees
• Bookkeeping services
• Payroll services
• Tax advice
• Legal fees relating to your business

Can You Claim Home Office Costs?

If you work from home, you may be able to claim some of the costs associated with using your home for business purposes.

We have a couple of blogs about this in more detail for sole traders here and limited companies here.

What About Your Mobile Phone and Internet?

For sole traders, if you use your phone or internet connection for business, you may be able to claim some or all of the cost. The amount you can claim depends on whether the expense is:

• Fully business use
• Fully personal use
• A mixture of both

Where there is both business and personal use, only the business element should normally be claimed.

For limited companies, the mobile phone contracts should be in the company name.

Expenses That Often Get Forgotten

Some of the most commonly missed expenses include:

• Business mileage where you use your own car for work (but not commuting to the office)
• Parking for business journeys
• Professional memberships
• Bank charges
• Payment processing fees
• Business stationery
• Courier and postage costs
• Business networking events

These smaller costs can quickly add up over the course of a year.

Keep Good Records

The easiest way to maximise your allowable expenses is to keep records throughout the year. Consider:

• Saving receipts digitally
• Using cloud accounting software
• Taking photos of paper receipts
• Recording expenses regularly rather than all at once

Good record-keeping doesn't just make tax returns easier.

It also helps ensure you don't miss valuable deductions.

A Word of Caution

It's important not to fall into the trap of claiming personal expenses as business costs.

When in doubt, ask for professional advice.

A good accountant will help you claim everything you're entitled to while ensuring you remain fully compliant with HMRC requirements.

The Bottom Line

Claiming business expenses correctly is one of the simplest ways to reduce your tax bill legally and ensure you're only paying tax on your true profits.

The key is understanding what's allowable, keeping accurate records and seeking advice when you're unsure.

You don't need to become a tax expert.

You just need a system that helps you stay organised and confident throughout the year.

Need Help Making Sure You're Claiming Everything You're Entitled To?

At CJL Accountancy, we help coaches, consultants and service-based business owners understand their finances, maximise allowable expenses and stay compliant with HMRC.

If you're unsure whether you're claiming the right expenses, we're here to help with straightforward, jargon-free advice.

Get in touch today to find out how we can help.