The mistakes that cost the most
- Underclaiming. Missing allowable costs such as use of home, mileage or software means paying more tax than you need to.
- Claiming private costs. Putting personal spending through the business, or the private share of a mixed cost, invites questions.
- Guessing with round numbers. Neat, evidence free figures are exactly what triggers a closer look.
- Claiming blocked items. Client entertaining and fines are never allowable, however business related.
- No receipts. Without evidence, HMRC can disallow the cost, so keep or photograph every one.
Claiming the trading allowance and your expenses
You can have one or the other, not both. The £1,000 trading allowance is an alternative to claiming your actual costs, not an extra deduction on top of them.
If your real expenses are under £1,000, use the allowance. If they are over, claim the actual figures and forget the allowance. It is decided year by year, so the right answer can change as the business grows.
Putting client entertaining through as a cost
Entertaining customers is not deductible for Income Tax or Corporation Tax, and the VAT on it is not recoverable. That is statute, not HMRC discretion, and it applies however plainly commercial the lunch was.
Staff entertaining is different and is generally allowable, provided it is genuinely for the business and not just incidental to entertaining customers. VAT on staff entertaining is also usually recoverable.
Watch the annual function exemption, which lets an employer spend up to £150 per head on an annual event such as a Christmas party without a benefit in kind arising. It is a cliff edge, not an allowance. Spend £151 a head and the whole amount becomes taxable, not just the £1. That figure has been £150 since 2003.
Missing the trivial benefits exemption
A benefit costing £50 or less can be given free of tax and National Insurance, provided it is not cash or a cash voucher, not a reward for work or performance, and not in the employment contract.
For directors of a close company there is an annual cap of £300, and that cap covers benefits given to their family and household too, not just the director. Like the £150, the £50 is a cliff edge. A £51 gift is fully taxable.
Using the wrong mileage figure
The approved mileage rate rose to 55p a mile for the first 10,000 business miles from 6 April 2026, having sat at 45p since 2011/12. Above 10,000 miles it remains 25p. Motorcycles are 24p and bicycles 20p.
Two things follow. If you are self employed and using simplified expenses, you should be claiming at the higher rate. If you are an employee whose employer still pays 45p, there is now a shortfall of 10p a mile you can claim tax relief on.
One trap: you cannot claim flat rate mileage and capital allowances on the same vehicle. Pick one method per vehicle and stay with it.
Getting use of home wrong in both directions
Self employed people can use HMRC's simplified flat rates by hours worked from home each month: £10 for 25 to 50 hours, £18 for 51 to 100, and £26 for 101 or more. Or you can apportion actual costs by area and time.
The flat rate covers running costs only, so you can still claim a business proportion of identifiable fixed costs such as council tax, insurance and mortgage interest alongside it. That point is regularly missed.
Going the other way, claiming a room as used exclusively for business can create a capital gains problem on that portion when you sell your home. The usual advice is to avoid exclusive use.
Employees claiming for working from home
Worth saying plainly, because it changed recently. The employee relief for working from home was withdrawn from 6 April 2026 and cannot be claimed for 2026/27. Your employer can still reimburse up to £6 a week free of tax and National Insurance, but there is no claim to make to HMRC. The self employed flat rates above are unaffected.
Reclaiming VAT without a VAT invoice
A card receipt, a bank statement line or an order confirmation is not a VAT invoice. Without the supplier's VAT number and the VAT charged, the claim is unsupported and will be disallowed on a check.
The test to apply before every claim
Was this cost incurred wholly and exclusively for the business. If it has a genuine dual purpose, personal and business, it usually fails unless the business part can be separately identified and measured. That single question resolves most of the arguments before they start.
Confident your expenses are right?
The sweet spot is claiming everything you are entitled to, and nothing you are not. TaxTune finds the costs you missed, keeps the claim clean, and makes sure it stands up.
Let us get your expenses right
We claim every allowable cost, split mixed ones correctly, and keep the whole thing defensible. Fixed fee.
Frequently asked questions
What is the most common expense claim mistake?
Two opposite ones: underclaiming allowable costs, which means overpaying tax, and claiming private or blocked costs, which invites HMRC questions. The fix is claiming the right costs with evidence.
What expenses do people forget to claim?
Use of home, business mileage, software, professional subscriptions and a share of phone and internet are all routinely missed, especially by people filing alone.
Can I claim private costs through the business?
No. Only business costs are allowable, and mixed costs must be split so you claim only the business share. Claiming private spending risks penalties.
Why are round numbers a problem?
Neat, evidence free figures suggest estimates rather than records, which is exactly what prompts HMRC to look more closely. Claim what you can actually prove.
Do I need a receipt for every expense?
Keeping evidence for your claims is essential. Without it HMRC can disallow the cost, so photograph or file every receipt and keep them for at least 5 years.