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Allowable expenses for sole traders in Ireland

Every category mapped to the Extracts From Accounts [124 - 168] line it goes on, what Revenue actually wants behind each one, and the eight things people claim that are never allowable. Taken from the Tax and Duty Manuals rather than from the form, because the form gives line numbers and says nothing about what is deductible.

The test everything else hangs off

Worth two minutes before the tables, because it explains why some answers below are stricter than you would expect and others more generous.

There is no list

Revenue does not publish a schedule of allowable expenses, and the Form 11 does not contain one — it gives you line numbers, not permissions. The test is in section 81(2)(a): a sum has to be wholly and exclusively laid out for the purposes of the trade.

Necessary is not the test

An expense does not have to be unavoidable to qualify. Revenue's manual is explicit that necessity is irrelevant once the money is spent in furtherance of the trade. What matters is the purpose it was spent for, not whether you could have got by without it.

Purpose, not effect

You look at why the money was spent, including the reason you did not articulate at the time. A cost with two purposes, one of them private, generally fails — which is why the answer to most mixed costs is apportionment rather than a yes or a no.

Divisible costs get split

A car, a home office and a phone bill can be proportioned between business and private use. A lunch cannot, because there is no part of it that is not also feeding you. That distinction runs through everything below.

What you can claim, and what proves it

Every sole trader completes this panel, whatever the turnover. Accounts are not submitted with the return — the totals are typed into these lines. The last column is the part most lists leave out. An expense is not established by the fact that you spent the money — it is established by being able to show what the money was for, and for a few categories the thing Revenue wants is a reasoning you can defend rather than a document that exists.

CategoryForm 11 lineNoteWhat proves it
Purchases131Stock and materials bought for resale or use in the work.Supplier invoices, plus your stock figures at both ends of the year. What Revenue is testing is that goods bought but not sold were carried as stock rather than written off as spend.
Salaries / Wages133Staff pay. Your own drawings are not an expense — they go to line 146.Payroll records and the PAYE submissions you filed during the year. The deduction has to reconcile to what went through PAYE Modernisation — a wage claimed but never reported is the easiest mismatch there is.
Additional Staff Costs134Employer PRSI, staff pension contributions, training.Employer PRSI from the payroll submissions, training invoices, and pension contribution statements from the provider.
Sub-Contractors (RCT)135Construction, forestry or meat processing subcontractors inside the RCT system.The RCT deduction authorisations from ROS alongside each subcontractor's invoice. Payments made outside the RCT system are the first thing looked at on a construction audit.
Other Sub-Contractors136Subcontractors outside RCT.The invoice, plus enough about the working arrangement to show the person was genuinely self-employed rather than an employee who should have been on payroll.
Consultancy, Professional fees137Accountant, solicitor, consultant.The professional's invoice, described well enough to show what the work actually was. Fees on buying a premises or an asset are capital and belong in the CGT computation, not here.
Motor, Travel and Subsistence138The private-use share is already taken out by the Business use % column, so line 160 stays blank — do not add it back again. VAT on petrol and most passenger cars is not reclaimable.A mileage log — this is the one people get wrong. Revenue takes the business fraction as business mileage over total mileage, so the log is the claim. Receipts prove you spent the money; only the log proves the split. Civil service mileage rates are not accepted for a sole trader.
Repairs / Renewals139Repairs keep an asset working. An improvement is capital — it belongs on the Capital items tab.The invoice, with a description that separates putting something back as it was from making it better than it was. The second is capital.
Rental Expenses140Rent for business premises. Rates and insurance are not this line — they fall into Other Expenses.The lease and the payment record. Rent on a dwelling is deductible only for the part used for the trade, so a home-based trade needs a basis for the share.
Depreciation (add back)141Depreciation is not deductible. Wear and tear at 12.5% is claimed instead — see the Capital items tab.Nothing to prove, because nothing is being claimed. Your accounts depreciation goes on this line as an add-back and the relief comes through capital allowances instead.
Bad debts / Provisions142Specific bad debts written off.The original sales invoice and a record of what you did to recover it. A general provision is not deductible; a specific debt you can name and show you chased is.
Rates143Commercial rates. The form has no separate line, so it lands in Other Expenses.The local authority bill and proof of payment. Local Property Tax is a different charge and is not deductible.
Insurance143Public liability, professional indemnity, business contents.The policy schedule. Where a policy also covers your home or a private vehicle, the business share needs a basis you can explain rather than a document that splits it for you.
Light, Heat and Phone143The private share is already taken out by the Business use % column, so line 162 stays blank — do not add it back again.The bills, plus the basis for the business share — and here the basis is the answer, not a document. Revenue publishes no percentage for a sole trader, so what is tested is whether your split is reasonable, arrived at honestly and applied consistently. A defensible basis you can explain beats a receipt that does not exist.
Advertising143No dedicated line on the form — part of Other Expenses.The invoice. One of the few categories that is rarely argued about.
Bank & payment fees143Bank charges, card processing fees, payment platform fees.The bank or card processor statement showing the charges. Interest on a genuine business loan belongs here too; the capital portion of the repayment does not.
Other Expenses143Anything allowable with no line of its own.The underlying invoice and a real description. This line draws attention precisely because it is unspecific, so name what the cost was rather than leaving it to be asked.
Entertainment (not allowable)161Client entertainment is not deductible and is added back at line 161. VAT on it is not reclaimable.An add-back rather than a claim. Section 840 disallows business entertainment, and the definition is broad: accommodation, food, drink, any other hospitality, and gifts.

Line numbers are from the Extracts From Accounts [124 - 168] panel of the 2025 Form 11. Revenue reprints the form each year and line numbers can move — check them against the form you are filing.

What is never allowable

Eight things sole traders put through the accounts every year that Revenue disallows, with the provision behind each so you can check it rather than take our word for it.

Never goes on the formBasisWhy
Client entertainments. 840 TCA 1997Disallowed outright, and the definition is wider than a meal — accommodation, food, drink, any other form of hospitality, and gifts. Entertaining genuine staff is carved out, a Christmas party being Revenue's own example, but that carve-out fails if the staff element is incidental to entertaining someone else. A sole trader has no staff to entertain unless they employ people, and never counts as their own staff.
Money you take for yourselfs. 81(2)(b) TCA 1997Drawings are not an expense. They are how a sole trader is paid, taken out of profit that has already been taxed, and they belong on line 146 of the form rather than anywhere in the expenses panel.
Your own labours. 81(2)(b) TCA 1997You cannot put a value on your own time and deduct it. Nothing left your hands, so there is no expense — however many weekends the job actually took.
Capital itemss. 81(2)(f) and (g) TCA 1997A van, a laptop, tools, an extension. Relief comes through capital allowances at 12.5% a year for eight years, not as a deduction in the year you bought it. A passenger car is capped on top of that.
The private share of anythings. 81(2)(a) and (b) TCA 1997Only the business portion of a mixed cost is deductible. This is not a technicality to be worked around — it is the whole reason the Business use % column exists, and claiming the full amount of a bill you also benefit from personally is the most common overclaim there is.
Fines and penaltiess. 81(2)(a) TCA 1997A parking fine, a speeding fine, a late-filing surcharge, interest on underpaid tax. There is no Tax and Duty Manual on this — the disallowance rests on the wholly and exclusively test, because a penalty is imposed on you personally for breaking a rule rather than laid out to earn profit. Payments that are themselves criminal offences are separately blocked by s. 83A.
Ordinary commutings. 81(2)(a) TCA 1997Travel between home and where you work is not deductible, and Revenue's manual is explicit that this holds even where some work is carried on at home — the journey always carries the purpose of getting home. Genuinely itinerant traders, whose home is the only place customers reach them and where the tools are kept, are the narrow exception.
Clothing that is not protectives. 81(2)(a) TCA 1997Protective clothing is deductible because the warmth and decency it also provides are incidental to the protection the trade requires. A suit is not, however strictly the job demands one — you would need to be dressed either way, and that duality of purpose is fatal.

Two of these are add-backs rather than omissions — depreciation at line 141 and entertainment at line 161. The form asks for them explicitly so the accounts figure can be reconciled to the taxable one. Leaving them blank when your accounts contain them is its own kind of error.

The four that cause the most trouble

Mixed-use costs, and the ones where the widely-repeated answer is wrong.

Phone and broadband

There is no Revenue percentage for this and no Tax and Duty Manual specific to it. A phone bill is a divisible expense like any other, so the general rule in s. 81(2)(a) applies: only the part laid out wholly and exclusively for the trade is deductible, and you work out that part yourself.

That makes the basis the deliverable rather than the paperwork. Keep the bills, and be able to say how you arrived at the split and why it is reasonable — a month of itemised calls, the proportion of the working day the line is used for the trade, the fact that a second line exists and is used only for the business. What Revenue tests on an intervention is whether the method is honest and applied consistently, not whether you produced a document that separates the two. No such document exists.

A phone or line used only for the trade, with a separate private phone, is the clean case: fully deductible, and the bill is the evidence. A single phone used for both never is.

Where people go wrong

A split that changes every year without the underlying pattern changing looks arrived at backwards. Pick a basis, write down how you got it, and keep using it.

Working from home

This is the section most Irish writing gets wrong, and the error is a specific one. Remote Working Relief — the €3.20 a day an employer may pay tax-free, and the percentage of utilities an employee may claim — has nothing to do with a sole trader's own trade. Revenue's manual on it says so in terms: the relief "will generally apply to employees and directors rather than chargeable persons (i.e., self-employed taxpayers...)". It sits in s. 114 and s. 114A, which are employment provisions. A sole trader can only claim it against a separate PAYE job they also hold, or through a spouse who is a remote worker.

What a sole trader uses instead is apportionment under s. 81. The statute helps here rather than hindering: s. 81(2)(c) disallows the rent of a dwelling house "except such part as is used for the purposes of a trade or profession". The carve-out is the claim. The same reasoning extends to light, heat and broadband for the part of the home given over to the trade, and Revenue's own manual on food expenses names "the expenses of running a home office" as an example of a cost that can properly be proportioned.

So the answer is a basis, not a form: which room or rooms, what share of the floor area, how much of the time they are used for the trade rather than the household. Keep the bills and keep the working.

Where people go wrong

Do not apply the €3.20 a day or the utility percentages to a sole trade. They are employee figures and using them is the single clearest sign a return was prepared from a blog rather than the legislation.

Motor expenses and the business use percentage

Where a car is used for both business and private purposes, only the business portion of the running costs is allowable, and Revenue's manual states how the fraction is arrived at: "the proportion that the business mileage bears to the total mileage incurred". Fuel, insurance, motor tax, servicing and repairs all follow that same fraction.

Which makes a mileage log the actual evidence. Receipts prove you spent the money; only the log establishes the split, and without it there is no defensible number to put in the Business use % column. Note that Revenue's manual describes sole traders commonly running every motor cost through the accounts and adding back the private share — either presentation is fine, so long as the add-back is real.

One point worth knowing before you copy a figure from anywhere else: "Revenue will not accept deductions for travel or subsistence expenses of sole traders based on the civil service rates." Those rates exist so an employer can reimburse an employee without a benefit-in-kind arising. They are not a shortcut for a self-employed person, and a claim built on them is built on the wrong basis.

The car itself is not a running cost. It goes through capital allowances, and a passenger car is capped by CO₂ band regardless of what it cost.

Where people go wrong

Home to work is not business mileage, even where you do some work at home. The journey carries the purpose of getting home, and that duality of purpose disallows it.

Food, subsistence and staying away

Food is the least intuitive part of the whole panel, and the answer is stricter than most people expect. Revenue's manual puts the principle bluntly: "Humans eat to live; they do not eat to work." Spending on food in the course of a trade nearly always carries a dual purpose, because you would have had to eat regardless.

The manual then closes the door most people try: "Where additional expenditure is incurred on food because the taxpayer must eat away from home, that expenditure still has a duality of purpose meaning it is not an allowable expense." A lunch bought on the road is not deductible, and neither is the extra cost of it over what lunch at home would have been. The case behind that — a carpenter claiming the difference between a 10p lunch at home and a 40p lunch on site — failed precisely because asking for the difference admits the rest was private.

Accommodation is treated differently. "Hotel accommodation incurred on a business trip – where there is no personal motive in the trip – is an allowable deduction." And there is a practical concession worth knowing: where a hotel bill covers both a reasonable overnight stay and food, the two are not to be separated. If the accommodation is allowable, the food on that bill is allowable with it.

Where a trip is genuinely for business, an incidental private element does not destroy the deduction. Staying an extra night because the later flight is cheaper does not stop the flights being deductible.

Where people go wrong

A meal bought separately on a day trip is not deductible even though a meal on an overnight hotel bill is. The difference is real and it is the accommodation that carries it.

How long to keep it all

Keep the documents for six years from the end of the tax year. Do not send them with the return — Revenue asks for them only on an audit or assurance check.

Ready to total it up? The sole trader spreadsheet has these categories as a dropdown and totals them straight into the lines above, and the document checklist lists what to have in front of you before you open ROS. Letting property as well? Rental income runs on different rules and a different panel of the same return.

General information about record-keeping and the 2025 Form 11, not tax advice. Sources are Revenue's Tax and Duty Manuals — Part 04-10-01 on travel, Part 04-06-17 on food and accommodation, Part 05-02-13 on Remote Working Relief and Part 04-06-08 on pre-trading expenses — together with sections 81, 82, 83A and 840 of the Taxes Consolidation Act 1997. Thresholds and manuals are revised; confirm on revenue.ie before you file.

Knowing what is allowable is the easy half.

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Allowable expenses for sole traders (Ireland) | KrinoDoc