What can a self-employed therapist claim as business expenses? The £1,000 allowance choice

If you started seeing private clients in the 2025/26 tax year, your first Self Assessment return asks a question that is easy to skip past: do you deduct the costs of running the practice, or do you use the £1,000 tax-free trading allowance instead? GOV.UK says you cannot do both for the same income. For a therapist whose costs are a few hundred pounds, one route may leave you better off; for one who pays for supervision, insurance and a room, it can be the other way round.

This is general information, not tax advice. Which route suits you depends on your own figures, and that is a conversation for an accountant. What follows describes how GOV.UK sets out the rules, so you can gather the right records and ask sharper questions. Figures and rules are as published on GOV.UK in October 2026.

The choice that comes first

GOV.UK describes the trading allowance as £1,000 of tax-free income from self-employment. If your total receipts are £1,000 or less, you generally do not need to report them. If they are more, you can deduct the allowance from your receipts, or you can deduct your actual allowable expenses. GOV.UK's expenses page states that if you use the allowance you cannot claim expenses or capital allowances.

Two practical consequences follow from that wording:

• The allowance is a flat amount. It does not depend on what you spent.
• If your real costs are above £1,000, claiming expenses is the route that reflects them. GOV.UK's own notes say that where expenses are more than income it may be better to claim expenses rather than the allowances.

A sensible question for your accountant: "On my figures, which route applies, and does anything else on my return change the answer?"

The categories GOV.UK lists

GOV.UK's page on expenses for the self-employed groups allowable costs under headings. The ones that map most obviously onto a talking-therapy practice are:

| GOV.UK heading | Example it gives | | --- | --- | | Office costs | Stationery, phone bills | | Premises costs | Heating, lighting, business rates | | Travel | Fuel, parking, train or bus fares | | Financial costs | Insurance, bank charges | | Advertising and marketing | Website costs | | Training courses | Courses related to your business, such as refresher courses | | Subscriptions | Trade or professional journals |

That list is the starting point, not a ruling on any particular item. Whether supervision fees, professional-body membership, personal therapy or a CPD course fit under one of those headings is a judgement about the facts, and the person to ask is your accountant. HMRC's own guidance is the authority, and the page is short enough to read in full.

Costs that serve two purposes

Therapists who work from home meet this quickly. GOV.UK says you can only claim the business part of a mixed-use cost. Its example is a £200 phone bill of which £70 is business calls: the claim is £70.

For working from home, GOV.UK offers two routes. You can claim a reasonable proportion of actual costs such as heating, electricity and internet. Or you can use simplified expenses, flat monthly rates based on hours worked at home. As of October 2026 GOV.UK gives these as £10 a month for 25 to 50 hours, £18 for 51 to 100 hours and £26 for 101 hours or more, and says you can only use them if you work from home for at least 25 hours a month. The flat rate does not include phone or internet costs, which are claimed separately as a business proportion.

Online practice raises a related question: how many of your hours are client sessions and how many are notes, admin and preparation. Keeping a simple log from the start makes either route easier to support.

What does not count

GOV.UK is plain that you can only claim costs related to business purchases, and that money you take out of the business for personal use is not an allowable expense. If you run your practice through a limited company, GOV.UK says you are not self-employed in this sense and the company claims under Corporation Tax, so none of the above applies in the same way.

What to record from day one

GOV.UK says self-employed people must keep records of business income and expenses to complete Self Assessment. It does not matter much whether that is a spreadsheet, a notebook or software, as long as it is complete and dated. Things worth capturing as you go:

• the date, amount and what each cost was for;
• the receipt or invoice, photographed if it is on paper;
• for mixed-use costs, how you worked out the business share;
• the hours you work from home, if you may use the flat rates.

How long to keep them is set out by GOV.UK on its record-keeping pages. Check the current period there or with your accountant rather than relying on a number repeated in a blog.

Dates this connects to

The 2025/26 return is due online by 31 January 2027, as covered in your first Self Assessment bill. Choosing between expenses and the allowance happens while you complete that return, so gathering receipts before January is considerably easier than reconstructing them in the last week. Later years bring more reporting. Making Tax Digital means keeping digital records and sending quarterly updates once your income passes the relevant threshold, and your record-keeping habits from this first year will carry straight into that.

If you are still working out what a new practice costs overall, the setting-up checklist lists the usual outgoings, and the practice resources include a guide on pricing that covers how fees relate to costs.

This article describes guidance published on GOV.UK as at October 2026 and is provided for general information. It is not tax, accounting or financial advice and does not take account of your circumstances. Take advice from your accountant and check the current position on GOV.UK before acting. Allowances, rates and rules can change.

MyOwnSession is practice management software for UK therapists. It does not prepare your tax return or tell you what you can claim. See how it works, or compare it with the alternatives.