HMRC expense categories for Making Tax Digital

Checked against GOV.UK · Updated 27 October 2026

Making Tax Digital for Income Tax uses the same expense categories as your Self Assessment return: 13 headings for sole traders, based on the SA103 self-employment pages, and 9 for UK landlords, based on SA105. If a business turns over less than £90,000 you can skip the detail and record each cost simply as an expense, and you never upload receipts, because HMRC only receives category totals.

How categories work in MTD

Every digital record you create needs three things: the amount, the date the money came in or the cost was incurred, and a category. HMRC confirms MTD uses the same income and expense categories as Self Assessment, so there is nothing new to learn if you already fill in a tax return.

Each quarter your software adds up the records in each category and sends HMRC the totals for the tax year so far. HMRC does not see individual receipts or invoices. See quarterly updates and deadlines for the dates.

Self-employment expense categories

These are the 13 expense headings HMRC's quarterly update direction sets for sole traders. The examples come from HMRC's notes to the full self-employment pages (SA103F).

Cost of goods bought for resale or goods used: stock, raw materials and other direct costs of what you sell.
Construction industry, payments to subcontractors: what you pay subcontractors for construction work, usually under the Construction Industry Scheme.
Wages, salaries and other staff costs: staff pay, bonuses, pensions, employee benefits, agency fees and employer's National Insurance. Never your own drawings.
Car, van and travel expenses: fuel, insurance, servicing, parking, vehicle tax, breakdown cover, train, bus, air and taxi fares, and hotels and meals on overnight business trips.
Rent, rates, power and insurance costs: rent for business premises, business and water rates, light, heat, property insurance, security and the business share of using your home.
Repairs and maintenance of property and equipment: fixing or maintaining your premises, tools and equipment.
Phone, fax, stationery and other office costs: phone bills, postage, printing, stationery, small office items and some software.
Advertising: newspaper and directory adverts, mailshots, free samples and website costs.
Business entertainment costs: entertaining clients, suppliers or customers. This has its own heading, but HMRC does not let you deduct it from profit.
Interest on bank and other loans: interest on business loans and hire purchase, but not the capital you repay.
Bank, credit card and other financial charges: bank, overdraft and card fees, lease interest and alternative finance payments.
Accountancy, legal and other professional fees: accountants, solicitors, surveyors, architects and professional indemnity insurance.
Other business expenses: trade journals, professional subscriptions and other small running costs that fit nowhere else.

Extra boxes on the tax return

The full SA103F has two further boxes used only with traditional accounting: irrecoverable debts written off, and depreciation and loss or profit on sale of assets. Depreciation is never allowable, so anything entered there must be added back as disallowable. The quarterly update direction does not list either of them.

The short self-employment pages (SA103S), for turnover under £90,000, use fewer boxes and have a single total expenses box you can use instead.

UK property expense categories

Landlords with UK property use these 9 headings in quarterly updates. Examples are from HMRC's UK property notes.

Rent, rates, insurance and ground rents: rent on a property you sublet, Council Tax and water rates you pay, buildings and contents insurance, insurance against loss of rent, and ground rent.
Property repairs and maintenance: painting, damp treatment, roof repairs, fixing furniture or appliances you supply.
Non-residential property finance costs: interest and loan costs for commercial lets, deducted in full.
Residential property finance costs: mortgage interest and similar on homes you let. These are not deducted as an expense but give a tax reduction instead.
Residential finance costs brought forward: unused residential finance costs from earlier years.
Legal, management and other professional fees: letting agent fees, legal fees on renewing a lease of under 50 years, eviction costs to re-let.
Costs of services provided, including wages: services you give tenants, such as cleaning, gardening or communal hot water.
Travel expenses: travel for your letting business. Landlords can claim mileage rate deductions for business motoring instead of actual costs.
Other allowable property expenses: stationery, phone and other sundry letting costs.

On SA105 itself there is no separate travel box, and replacing domestic items in residential lets is claimed in its own box at the year end. Foreign property is simpler again: one income total, lease premiums, and one allowable expenses total. More detail is in MTD for landlords.

Consolidated expenses: the £90,000 rule

If turnover from a self-employment, or your total UK property turnover, is under £90,000 (the VAT registration threshold), you can choose simpler categorisation for that tax year. Software calls this consolidated expenses: you only mark each record as income or expense.

Residential landlords must still record residential finance costs, such as mortgage interest, separately.
With two or more businesses, each one must be under the threshold to use it.
If turnover reaches £90,000, you must fully categorise every record for that business from the start of the tax year before you can send your next update.

HMRC suggests categorising in full if you are not sure you will stay under £90,000. Example: a dog groomer on £40,000 a year can record £600 of shampoo and £300 of insurance as plain expenses.

Personal and mixed-use costs

You do not have to record purely personal spending. For mixed costs, HMRC lets you record just the business part, or the full amount plus the disallowable part, or the full amount with one adjustment to the category total later.

Example: a £240 phone bill with £90 of personal use can go in as £150 of office costs, or as £240 with £90 marked disallowable. For what counts as business, see allowable expenses for sole traders.

Keeping the records with Snapfile

Snapfile lets you send receipt photos, PDFs or texts on WhatsApp. It records each one with its date and amount, assigns one of the HMRC expense categories above, tracks the tax year and quarter, and exports a CSV. It does not submit to HMRC, and it is free during early access.

Common questions

What are the HMRC expense categories?

For sole traders they are the headings on the SA103 self-employment pages, such as cost of goods, car, van and travel, rent and rates, office costs, advertising and professional fees. Landlords use the SA105 property headings, such as repairs, finance costs and agent fees. MTD uses exactly the same categories.

Do you have to upload receipts for MTD?

No. Quarterly updates send HMRC totals for each category, not individual receipts or invoices. You must still keep your receipts and invoices, or copies, in case HMRC asks to see them.

What does consolidated expenses mean in MTD?

It means recording one total for expenses rather than splitting them into categories. You can do this for a business whose turnover is under £90,000, although residential landlords must still show finance costs separately.

Which category does mileage go in?

Vehicle costs go in car, van and travel expenses. If you use the flat mileage rates under simplified expenses instead of actual costs, HMRC says you make an adjustment for this before finalising your Income Tax position.

Sources: GOV.UK: Create digital records (Making Tax Digital for Income Tax); GOV.UK: Send quarterly updates; GOV.UK: Making Tax Digital for Income Tax: quarterly update direction; GOV.UK: Making Tax Digital for Income Tax: digital record-keeping direction; GOV.UK: Self Assessment: self-employment (full) (SA103F) and notes; GOV.UK: Self Assessment: self-employment (short) (SA103S); GOV.UK: Self Assessment: UK property (SA105) and UK property notes; HMRC Developer Hub: Self Employment Business (MTD) API; HMRC Developer Hub: Property Business (MTD) API; GOV.UK: Expenses if you're self-employed; GOV.UK: Property Income Manual PIM2220 travelling expenses. This is general information, not tax advice; check GOV.UK or an accountant for your situation.

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