Quick answer
MTD doesn’t change what you can claim. You report expenses in the usual Self Assessment categories each quarter, or as one total if your turnover is under the £90,000 VAT threshold.
MTD doesn’t change what you can claim
The rules on allowable expenses are the same as before. What changes is that you record them digitally as you go and report them each quarter.
Sole trader categories
cost of goods bought for resale
wages, salaries and other staff costs
car, van and travel expenses
rent, rates, power and insurance
repairs and maintenance
phone, fax, stationery and other office costs
advertising and business entertainment (entertainment isn’t usually allowable)
interest on bank and other loans, and bank charges
accountancy, legal and other professional fees
other allowable business expenses
Depreciation isn’t allowable. You claim capital allowances on equipment and vehicles instead, usually at the final declaration stage.
Landlord categories
rent, rates, insurance and ground rent
property repairs and maintenance
residential finance costs (relief is given as a tax credit, and they’re reported separately)
legal, management and other professional fees
costs of services provided, including wages
other allowable property expenses
Sending one total figure
If your turnover is below the VAT registration threshold (currently £90,000), you can report your expenses as a single total in your quarterly updates instead of splitting them into categories.
Keep the evidence
You still need to keep receipts and invoices to back up what you claim. Snapping a photo into your software when you pay is the easiest habit to build.