Every expense you record in Invoice4You goes into one of fourteen categories. They are not our invention — they follow the boxes on HMRC's self-employment pages (SA103), so at the end of the tax year your totals drop straight into the return, and your accountant sees numbers they recognise.
This guide answers the question you actually have when you're standing at the till: "where does this one go?" It also flags the handful of things that look like business expenses but HMRC will not accept.
This is general guidance, not tax advice. If your situation is unusual, ask your accountant — and if you don't have one, that fee goes under Accountancy & professional fees.
The golden rule
An expense is allowable if it was wholly and exclusively for the business. If something is partly personal — your phone, your van, your home — you claim the business share and only that. Keep the receipt (Invoice4You stores the photo with the expense) for at least five years after the 31 January filing deadline.
Quick lookup: what did you buy?
| You paid for… | Pick this category | Notes |
|---|---|---|
| Diesel, petrol, charging | Car, van & travel | Only if you claim actual vehicle costs. If you use the mileage rate instead, don't record fuel at all — see Mileage below. |
| Van insurance, MOT, tyres, servicing, breakdown cover | Car, van & travel | Same rule: actual costs or mileage, never both for the same vehicle. |
| Parking, tolls, congestion charge, train or bus for a job | Car, van & travel | Parking fines and speeding fines are not allowable — record them under Other if you want them in your records, they'll be excluded from your profit. |
| Mobile phone bill, broadband | Phone, internet & office costs | Business share only. A phone used 70% for work → claim 70%. |
| Stationery, printer ink, postage, software subscriptions, Invoice4You itself | Phone, internet & office costs | |
| Rent for a workshop, unit or storage | Rent, rates, power & insurance | |
| Business rates, electricity and gas for premises | Rent, rates, power & insurance | For your home, use the Home office mode instead of recording bills here. |
| Public liability insurance, tool insurance, professional indemnity | Rent, rates, power & insurance | |
| Materials you fit or sell on — timber, cable, tiles, parts, paint | Cost of goods for resale | Anything that becomes part of the job or is sold to the customer. |
| Stock bought to resell | Cost of goods for resale | |
| Your accountant, bookkeeper, solicitor, surveyor | Accountancy & professional fees | Legal fees for buying property or settling a personal dispute are not allowable. |
| Fixing a tool, servicing a machine, repairing the workshop roof | Repairs & maintenance | Repairs keep something working. Improvements (a bigger, better thing) are capital — see Tools and equipment below. |
| Website, business cards, Google or Facebook ads, van signwriting, Checkatrade listing | Advertising | |
| Wages, employer's NI and pension contributions for staff you employ | Wages & staff costs | Money you take out for yourself is not an expense — it's your drawings. |
| Subcontractors you pay under CIS | Payments to subcontractors (CIS) | Record the gross amount before the deduction. |
| Bank account fee, card machine fees, PayPal or Stripe charges | Bank & card charges | |
| Interest on a business loan, van finance interest, business credit card interest | Bank & loan interest | Interest only — the repayment of the loan itself is not an expense. |
| Taking a client to lunch, drinks for customers, gifts | Business entertainment | Recorded, but not allowable — HMRC disallows entertaining, and you can't reclaim the VAT. Invoice4You keeps it so your books match your bank; it's excluded from taxable profit. |
| A customer who never paid | Bad debts | Only once you've genuinely given up on it. |
| Anything else, or you're not sure | Other | Use it sparingly and write a clear description — it's the first thing an accountant will ask about. |
The three "modes" on the Add Expense screen
Standard is a normal purchase with a receipt — everything in the table above.
Mileage is for using your own car or van for work and claiming HMRC's flat rate per mile instead of fuel, insurance and repairs. For the 2026–27 tax year the rate for cars and vans is 55p a mile for the first 10,000 business miles, then 25p; motorcycles are 24p. Record the trip and the miles; Invoice4You does the arithmetic. Two rules: home-to-your-usual-workplace commuting doesn't count, and once you use the mileage rate for a vehicle you stick with it for as long as you use that vehicle.
Home office is HMRC's flat rate for working from home, for people who spend 25 hours a month or more doing admin, quotes and paperwork at the kitchen table: £10 a month for 25–50 hours, £18 for 51–100, £26 for 101 or more. It covers heat, light and the wear on your home; it does not cover your phone or broadband, which go under Phone, internet & office costs as a business share.
Things people get wrong
Tools and equipment. A £30 drill bit is a running cost — Repairs & maintenance or Cost of goods depending on whether it's consumed on the job. A £900 table saw or a new van is a capital purchase. HMRC handles it through capital allowances (most sole traders can deduct the full cost in the year through the Annual Investment Allowance), which is why Invoice4You has no "Depreciation" category: depreciation is not an allowable expense on a self-employment return. Record big equipment under Other with a clear description, and your accountant will apply the allowance.
Food and drink. Your own lunch on a normal working day is not allowable — you'd have eaten anyway. A meal is allowable when you're travelling for work outside your normal pattern (a job three hours away, an overnight stay). That goes under Car, van & travel, not Business entertainment, which is only for entertaining other people.
Clothes. Everyday clothes are not allowable even if you only wear them for work. Protective clothing (steel toe-caps, hi-vis, gloves) and uniform with your logo on it are. Put them under Other.
Fines. Parking tickets, speeding fines, late-filing penalties: never allowable, whatever the circumstances.
Your own pay, tax and National Insurance. Not expenses. Income Tax and Class 4 NI are calculated on your profit; they don't reduce it.
Personal purchases on the business card. Just don't record them. If you must, use Other and a description that says "personal — exclude".
VAT. If you're VAT-registered, Invoice4You asks for the VAT on each expense and totals what you can reclaim. You can't reclaim VAT on business entertainment, on cars bought for mixed use, or on anything without a valid VAT receipt. If you're not VAT-registered, the gross amount you paid is your expense, VAT included.
When you still can't decide
Ask yourself two questions in order. Would the business have this cost if I didn't personally exist? If no, it's personal or drawings. Does it keep the business running this year, or does it buy something the business will use for years? Running costs go in the table above; long-lived things are capital and go to your accountant.
And if it's still a toss-up between two categories, pick the closer one and write a good description. HMRC cares far more that the expense is genuine and documented than which of two neighbouring boxes it landed in.
Sources: HMRC, Expenses if you're self-employed; HMRC, Simplified expenses — vehicles and working from home; HMRC, Self-employment (full) notes SA103F. Rates quoted are for the 2026–27 tax year; check gov.uk for the current year.