Can You Claim Expenses Without Receipts? Self Assessment for Sole Traders

If you are a sole trader completing a Self Assessment tax return in the UK, you might wonder whether you can claim business expenses without having receipts. The short answer is that while keeping receipts and records is strongly advised, there are limited circumstances where expenses can be claimed without receipts, but with important conditions and supporting evidence.

Record Keeping Requirements

HM Revenue and Customs (HMRC) requires you to keep records to support the figures you enter on your tax return. This includes evidence of your income and expenses. Receipts, invoices, bank statements, and other documents help prove the expenses you claim are legitimate business costs.

For sole traders, records should be kept for at least 5 years after the 31 January submission deadline of the relevant tax year. Without adequate records, HMRC may challenge your claims or disallow expenses.

Claiming Expenses Without Receipts

If you do not have a receipt, you cannot simply guess the amount or claim expenses without any proof. However, HMRC recognises that sometimes receipts are lost or unavailable. In these cases:

• Alternative evidence: You may provide other evidence such as bank or credit card statements showing the purchase, or a detailed written record of the expense including date, amount, and reason.
• Reasonable estimates: For small or regular expenses where receipts are not commonly issued (for example, parking fees or small cash purchases), you may use reasonable estimates but should keep a detailed log to support these claims.
• Consistency and honesty: Your records must be consistent and honest. HMRC may ask for explanations or additional proof if your claims seem excessive or unusual.

Trading Allowance and Expenses

If your gross trading income is £1,000 or less in a tax year, you may not need to declare this income or claim expenses at all, thanks to the trading allowance. If your income exceeds £1,000, you can either:

1. Use the £1,000 trading allowance instead of deducting expenses, or
2. Claim actual expenses (which requires records and evidence).

However, if your allowable expenses are less than £1,000, it is usually simpler to claim the trading allowance rather than claim expenses. Claiming expenses is beneficial only if your deductible expenses exceed £1,000 or if the expenses create a smaller taxable profit than the allowance.

Examples

• If you buy office supplies and lose the receipt but have a bank statement showing the payment and a note about what it was for, you can use this as evidence.
• If you pay for fuel in cash and do not get a receipt, keeping a mileage log and noting fuel purchases may help justify your expense claims, though receipts or invoices are preferable.
• If you have no records at all for an expense, HMRC is unlikely to accept the claim, and it may be disallowed if questioned.

Summary

While you can sometimes claim expenses without original receipts, you still need some form of evidence to support your claim. Keeping thorough and organised records is the best way to ensure your expenses are accepted by HMRC. Alternative evidence such as bank statements or detailed records may be acceptable in some cases, but relying on this regularly is risky. When in doubt, maintain good record-keeping habits to avoid problems with your Self Assessment tax return.

Official reference: https://www.gov.uk/self-assessment-tax-returns. Topic-specific official guidance. Always check the latest official guidance. Related forms: Browse our form category.

Important: This article provides general information. Government rules, forms and procedures can change, and this article may not reflect the latest updates. Check current GOV.UK guidance or the relevant authority before relying on it. ITG & Co. is independent and is not affiliated with a government department.