Freelancing is the most effective way to earn money as it offers flexibility and independence. You do not have to loop your managers in every now and then. You are a boss of yourself, no begging for leaves and no more patching together excuses for reporting late or missing deadlines.

Freelancing is not a novel concept, but there has been a surge in the number of freelancers. To cope with the soaring costs of living, many full-time employees in the UK are adopting a polygamous working trend.

What will be the types of tax deductions for freelancers in 2026?

If you are working as a freelancer, you would certainly be concerned about tax deductions. This blog discusses tax deductions for freelancers in 2026:

§  Home office expenses

Freelancers usually work from their homes. It means some household expenses, such as rent, electricity bills, internet, and repairs, include the cost of running a business too. Of course, if you did not have to work from home, you would consume less energy, which means a lower electricity bill.

In order to have these expenses deducted, you must have a clear record. Allocate expenses proportionately. This will work better if you set a dedicated room for your work. For instance, if you have four rooms in total and one of them is your work office. You can claim 25% of the total electricity expenditure while filing a tax return. Likewise, you can claim 25% of the rent.

§  Internet, phone and work-related purchases

If you use the internet for work, you can claim internet bills. Likewise, you can claim phone bills as well as any purchase of books and stationery, for instance, aimed at running your business. If your business generally involves too many phone calls, you should have a business contact number. It would make it easier to claim phone bills.

Other expenses that you can claim for deductions include, but are not limited to:

ü  Stipend paid to a web developer or designer

ü  Marketing cost

ü  Domain hosting

ü  Cloud storage

ü  Any business subscription

ü  Software purchase or subscription

By claiming these expenses, you will be able to retain a big portion of your income.

§  Fees and outsourcing charges

Freelancing is not simply hitting keypads on your computer or laptop. It is a fully-fledged business that you have been running from home. You will need to create a website, invest in marketing, and outsource some services.

Payments made to accountants, marketing experts, financial consultants, a web designer, a web developer and tax deductible. Payments made to subcontractors and outsourcing companies are fully tax-deductible.

However, it is crucial that you keep all invoices to maintain the actual payment record. This will help you get tax benefits without any hassle.

§  Travel and transportation

Business-related travel expenses are tax-deductible. For instance, if you often have to travel to meet your clients and attend conferences, you can have those expenses deducted. Travel expenses include the cost of the following:

ü  Airfares

ü  Train tickets

ü  Cab fares

ü  Mileage covered for business tours (if you use your personal vehicle)

It is essential to bear in mind that personal expenses cannot be claimed. You must have a separate record of professional trips to substantiate claims.

§  Office equipment and supplies

There are a lot of supplies you would need to work as a freelancer. They include stationery, a laptop and other supplies. You can claim all of these expenses while filing your income tax return.

If you have equipment that depreciates, you can claim depreciation as well. For instance, if you have a car that is used for business errands, it is eligible for a tax deduction. If you take out a loan to purchase any office supplies or gadgets, you can claim interest payments too.

For instance, if you take out a women-owned business loan to purchase a laptop, you can claim interest payments.

§  Retirement contribution

Retirement contributions are also tax-deductible. You are eligible to claim those contributions if you meet the following two conditions:

ü  You are under 75 and a UK resident.

ü  You contribute to a registered scheme.

Tax benefits are offered up to 100% of your annual earnings or £3,6000, whichever is higher. If you are a non-taxpayer, you can claim 20% contributions up to £3,600.

§  Learning-related expenses

You cannot stop learning and honing skills just because you work as a freelancer. Market trends change, and it is vital to adapt to them. You will have to take up courses, workshops and certification programmes. They will all cost you money.

You should try to keep proof of those expenses, as they are tax-deductible. If you have a proper record of your expenses, you can easily get these expenses deducted without any hassle or delays.  For instance, if you sign up for online courses such as digital marketing, language training or coding, you can easily claim expenses you made for them. Make sure that the course is related to your freelance work; you will not get tax deductions.

Changes in compliances in 2026

Here are some changes in compliance that are mandatory from April 2026:

§  Even if your income is not taxable as a freelancer or self-employed, it is mandatory to update your income records with the HMRC. From April 2026, all individuals, whether they are freelancers or self-employed, will be required to update HMRC quarterly about their income.

§  It is compulsory to have a record of all transactions that you make to run your business. Business-oriented transactions will be tax-deductible only if you are able to prove it. Having records makes it easier and smoother to claim.

§  If you have a gadget or a device that you use for both business and personal reasons, you will be able to claim a portion related to your business only.

Ways to keep your freelance tax records organised

Here is how you should keep your tax records organised to claim them as a freelancer:

§  You should maintain all receipts. Bookkeeping is the key. If you cannot do it, hire an accountant for this.

§  You should use accounting software such as QuickBooks. They will help you track your business expenses. In addition, they will create a well-organised spreadsheet. It is helpful for those who have just started freelancing.

§  Receipts, invoices and bank statements must be maintained as you will have to submit them to claim business expenses. There must be a separate log of business miles if you use your personal vehicle for business purposes, too.

§  Make sure that you update all your records so you do not panic at the last minute of return filing.  

Staying organised can make it easier and simpler for you to file your income tax. This also ensures that you can claim every penny that you are entitled to claim.

The bottom line

If you work as a freelancer, you can claim business-related expenses at the time of filing your income tax return. However, you must have a separate record of all business expenses. Make sure that you keep all receipts with you. If there is anything that is used for both personal and business expenses, you will be able to claim only business-specific expenses.

Handling your taxes does not have to be rocket science, but if you are not certain about it, you should consult a tax professional.