How to claim for equipment and tools as a sole trader – what HMRC allows

If you’re self-employed and spend money on tools, tech or gear for your work, there’s a good chance you can claim some or all of that as a business expense.

But the rules aren’t always clear.

This is especially true when you use something for both business and personal reasons.

In this guide, we cover the basics of claiming equipment costs as a sole trader, from laptops and mobile phones to power tools and office chairs.

We’ll explain when you can deduct the full amount, when you’ll need to apportion it, and how capital allowances work in practice.

What counts as equipment?

“Equipment” can mean different things depending on your business. If you’re a photographer, it might be lenses, tripods and editing software. If you’re a builder, it could be drills, saws and safety gear. For a freelancer, it might just be a laptop and a desk.

The key question is whether the item is used for your work or for personal use. That’s what HMRC cares about.

Some common examples include:

• Laptops, desktops and tablets
• Software and apps (if used for work)
• Mobile phones (and sometimes the contract)
• Office furniture or desk setup
• Tools and machinery
• POS terminals or card readers
• Cameras, microphones, and lighting rigs

If you buy something purely for business use, and it doesn’t have any private benefit, you can usually claim the full cost. But if you use it partly for personal reasons, you’ll need to make a fair estimate and only claim the business portion.

Revenue vs capital – what’s the difference?

This is where it gets a bit technical. In HMRC’s eyes, not all expenses are treated the same. Some are considered day-to-day “revenue” expenses, which you claim in full in the year you pay for them.

Others are “capital” assets – typically more expensive items that you’ll use over time.

There’s no exact cut-off point, but here’s a general rule of thumb:

• Software subscriptions, repairs and consumables = revenue (claim in full)
• Laptops, tools, furniture, machinery = capital (claim via allowances)

If in doubt, your accountant can help you decide – but if you’re filing on your own, you just need to know which box to tick.

Equipment claims at a glance

Capital allowances: how they work

Most self-employed people use something called the Annual Investment Allowance (AIA) to claim the cost of capital items.

This lets you deduct up to £1 million worth of qualifying items from your profit in the year you bought them.

So if you spend £1,200 on a new laptop for work, and it’s 100% for business use, you can usually deduct the whole amount under AIA.

You don’t have to spread it over several years unless you want to. Just make sure you keep the receipt and record the purchase date clearly.

HMRC’s full capital allowances guidance is here: https://www.gov.uk/capital-allowances

Read more about capital allowances here.

What if I use it for personal stuff too?

This is really common, especially with laptops, mobile phones, and work from home desks. HMRC accepts that many self-employed people use items for both business and personal reasons. But you can’t claim the full cost unless it’s solely for business use.

So if you buy a £600 laptop and use it 70% for client work and 30% for personal stuff, you can only claim £420 (70%). You don’t need to keep a spreadsheet of hours — just make a reasonable, honest estimate and note it down in your records.

The same applies to phones. If you make client calls on your personal mobile, work out roughly what percentage is for business and claim that share of the bill.

Read more on claiming home office costs here.

Can I claim for something I already own?

Yes – if you started using it for business after you set up as a sole trader. Say you already had a laptop but began using it for work once you went self-employed. You can include a proportion of its value as a business expense.

You’ll need to estimate its current market value as of the date you started using it for business. If it was worth £400 at the time and you used it 50/50 for business and personal, you could claim £200.

Keep a note of your reasoning – just in case HMRC ever queries it.

What about software and subscriptions?

If you pay for tools like Canva, Microsoft 365, Adobe, or cloud storage for your business, these are usually classed as allowable revenue expenses. You can deduct the full cost, or a proportion if they’re partly personal.

One-off software licences, like buying a design tool outright, may need to be treated as capital. Subscriptions tend to count as day-to-day running costs. Read our guide to claiming software and subscription expenses.

You can also claim for accounting software – see your options here.

More guidance from HMRC: Self-employed allowable expenses

Do I need to keep all the receipts?

Yes — keep them all, even for things you only claim partially. HMRC can request proof for up to 5 years after the deadline for the relevant tax year, and digital copies are acceptable.

If you don’t have a receipt, you might still be able to claim with other evidence (like a bank statement), but it’s riskier. When in doubt, store everything safely.

More on record keeping here.

Can I use simplified expenses instead?

Simplified expenses are a way to avoid tricky calculations for things like working from home or using a vehicle. But they don’t usually apply to one-off equipment purchases. You’ll need to claim those separately using actual costs.

That said, if you’re running a very lean business from home, the flat rate options can save you time.

Here’s a broader list of what you can claim.

Final tip: don’t over-claim

It’s tempting to lump as much as possible into your expenses, but HMRC has seen it all before. Stick to honest, fair estimates, especially for mixed-use items.

And if you’re unsure or planning a significant spend, speak to an accountant first. You might be able to spread the cost over time to reduce your tax bill.

Not sure if you need an accountant? Here’s how to decide.