The tax reliefs sole traders miss most — and how to actually claim them

HMRC will happily take your money; it won't remind you what you're owed. Most sole traders quietly overpay on a handful of reliefs — not because they're careless, but because nothing prompts them. Why reliefs go unclaimed Two reasons, and neither is laziness. First, nothing prompts you. Your tax return asks what you earned and spent; it never asks, "did you know you could claim this?" The system is built to collect, not to remind. Second, boundary confusion: half of these reliefs sit on a judgement call — business or personal? capital or revenue? simplified or actual? — and when people aren't sure, they leave it out "to be safe." Leaving it out to be safe is exactly how you overpay. The good news: most of the money hides in a short list. Here are the ones sole traders miss most, and how to claim each properly. Use of home If you work from home, you can claim a share of your household running costs — and there are two routes. The simplified flat rate gives you a fixed amount based on the hours you work from home each month: no receipts, no maths. The apportioned-actual method takes your real costs — a slice of heating, electricity, broadband, council tax, rent or mortgage interest — and claims the business proportion, usually by rooms and time used. Which wins? The flat rate is easy and fine if you work from home occasionally. If home is genuinely your base — most freelancers — the actual method is often materially larger, because a real proportion of real bills usually beats a small flat figure. The catch is that "actual" needs a defensible basis (how many rooms, how much of the time) and the evidence to back it. Work both out; claim the bigger, defensible one. Business mileage Use your own car for work? Again, two methods. The simplified route claims a set amount per business mile — one rate up to an annual-miles threshold, a lower rate above it. The actual-cost route claims the business proportion of running the car: fuel, insurance, servicing, plus capital allowances on the vehicle. The easily-missed detail: for a given vehicle you generally have to stick with the method you started with. Pick per-mile for a car and you can't later switch that car to actual costs. So choose deliberately, not by accident — and keep a mileage log either way, because that log is the evidence. Capital allowances on equipment The laptop, the camera, the tools, the desk — the things you bought to do the work. These aren't ordinary expenses claimed in one line; they're capital items, claimed through capital allowances. The Annual Investment Allowance lets you write off the full cost of qualifying equipment against your profit in the year you buy it, up to a limit most sole traders never come close to. This is the one people most often miss entirely, because a £900 camera doesn't feel like a "tax thing" — it feels like a purchase. It's both. If you bought equipment for the business, it belongs on your return. Pension contributions Paying into a personal pension earns tax relief — but the relief is computed from what you actually contributed at your marginal rate, within the annual allowance. "Pensions save you tax" is true and useless; the figure that matters is your contributions and your rate. The miss here is usually not connecting the pension you already pay into with the relief you're entitled to claim on your return. A loss is worth money, too Had a lean year, or a start-up year where costs outran income? A trading loss isn't just a bad result — it has cash value. Depending on your circumstances you can set it against your other income in the same or the previous year (reducing tax you've already paid), or carry it forward against future profits. The miss is treating a loss as nothing to report. It's one of the few moments the tax system can hand money back. (A myth worth retiring while we're here: R&D tax relief is a company relief — sole traders can't claim it. If someone tells you otherwise, that's an incorporation conversation, not a sole-trader one.) The rule that ties them together Notice what every one of these shares. The claim isn't the hard part — the justification is. Use-of-home needs a basis for the proportion. Mileage needs a log. Capital allowances need the purchase and its business purpose. Pension needs the contribution record. A claim is only worth making if it's defensible, and a claim is defensible when it has two things: a reason (why it's allowable) and evidence (proof it happened). Claim with those, and an HMRC question is a five-minute answer. Claim without them, and you've swapped an overpayment for a different kind of problem. This is also why "you could save £2,400 on your home office!" tips are close to worthless. They're a generic number attached to nobody's actual situation. Your real figure depends on your bills, your miles, your kit and your contributions — and it comes with its own reason and evidence, or it isn't safe to claim. How to actually find yours So the honest answer isn't a listicle; it's a method. Go through the year's transactions and, for each relief, work out the real number from your data — both methods where there's a choice — pick the larger defensible one, and attach the reason and evidence as you go. Do that by hand once and you'll see why software should do it: it can read your transactions, compute each relief from your actual figures, show you the pound value and the why, and flag the ones you're missing — instead of handing you a generic estimate. That's the difference between being told you might be owed something and being shown exactly what, and why. TaxSync surfaces the reliefs you're missing — computed from your own transactions, with the actual pound figure and the reason behind it, ready to review before you claim. General information, not personal tax advice — your situation may differ, and rates change year to year.