What are simplified expenses?
Simplified expenses are a way of calculating your business expenses using a flat rate, rather than the actual cost.
You can use simplified expenses if you are a sole trader or in a partnership.
Note: you cannot use simplified expenses if your partnership has a company as a partner.
For more information on simplified expenses, visit HMRC.
When can I use simplified expenses?
There are three types of expenses that you can calculate using a flat rate:
- Vehicles (mileage)
- Working from home
- Living at your business premises
In order to use simplified expenses you need to record your business miles for vehicles, hours you work at home and how many people live at your business premises over the year.
Vehicles (mileage)
If you use your vehicle (car, van or motorbike) for work, you can use a flat rate to calculate the associated running costs:
| Vehicle | Flat rate per mile with simplified expense |
| Cars and good vehicles (first 10,000 miles) | 45p |
| Cars and good vehicles (first 10,000 miles) | 25p |
| Motorcycles | 24p |
Note: You can't use the simplified expenses for a vehicle if you have already claimed capital allowances for it or have included it as an expense to work out your business profit
Working from home
If you work from home for more than 25 hours a month, you are able to claim a portion of your utility bills (e.g. gas and electricity) as allowable expenses. To save time on calculating the business portion of these expenses, you can use the following flat rates:
| Hours of business use per month | Flat rate per month |
| 25 to 50 | £10 |
| 51 to 100 | £18 |
| 101 and more | £26 |
Note: Telephone and Internet bills are not included in this flat rate. You can calculate the business portion of these expenses to maximise your deductions. For more information, refer to this article on allowable expenses for Self Assessment.
Living at your business premises
This is not the same as working from home. Some businesses may use a small portion of their business premises as their home (e.g. you run a bed & breakfast and also live there). You can use a flat rate to determine the personal use of the premises based on how many people live there. This amount should then be deducted from the overall cost of the premises so that you are only claiming the business portion of the expense.
| Number of people | Flat rate per month |
| 1 | £350 |
| 2 | £500 |
| 3+ | £650 |
