“Expenses” may have become a dirty word following the scandal that has engulfed politicians in recent weeks but self-employed people are still legitimately entitled to offset a number of overheads against profits for tax purposes.

Rent, mortgage interest, utility bills and business rates, as well as many other costs that relate directly to an individual’s work, can be written off against their earnings to reduce the amount of income tax due.

There are rules that self-employed people must abide by, however, and they must keep impeccable records of their outgoings and proof that these are related to their profession.

One headache for self-employed people is that the rules are not clear cut. But if they are deemed to have broken the rules, or even bent them too far, they could face hefty bills and fines from HM Revenue and Customs.

The general principle is that self-employed people can claim expenses that are wholly and exclusively incurred in their job.

Exactly what they can claim will depend on the type of business they have. Most people will claim for the running costs of an office, whether they work from home or elsewhere. People who work from a business premises can claim tax deductions on all the rent on the property – or the mortgage interest – and all of the bills, such as heating, water and electricity. Deductions also include insurance, repairs of equipment, stationery, postage, telecommunications and advertising.

Claims can become more complicated for those who work from home as they can only deduct a proportion of their total costs.

“An area people come to grief on is the appropriate mixture of private and business expenses,” says Patricia Mock at Deloitte.

“If you run your business from home, you can claim a portion of the expenses. If you have a six-room house and one room is used for the office, you can claim one- sixth of the rent you are paying, for example.”

Utility bills can be harder to work out. “On the annual electricity bill you could claim a reasonable portion,” explains Mock. “You would have to make an estimate of how much you use privately and for business.”

The Revenue does not require an exact breakdown of costs incurred for business and personal use but Mock says the estimates provided must have some reasonable methodology behind them.

She points out that it is important that claims are realistic and appropriate, and can be substantiated.

This is particularly the case for expenses that are tailored to an individual’s job – the specific tools a plumber needs, for example, or the materials required by an artist – which can be less transparent.

People are entitled to deduct any expense they can reasonably argue is necessary to do their job. So, for example, a playwright could claim for the cost of theatre tickets as long as they were for research purposes.

However, if the Revenue deemed an expense insufficiently linked to the line of work – if the playwright included tickets for concerts, perhaps, rather than just plays – it may reject the claim.

“If the claims are within reason there shouldn’t be a problem” says Richard Mannion, director of national tax at Smith & Williamson.

“If it looks like the activity was for pleasure rather than research, the Revenue might take an issue with it.”

Also, self-employed people can only claim on materials they have used – not just bought – in that tax year.

They can claim for transport costs incurred during work, too – including first-class travel, but they cannot deduct the cost of travelling to and from the office.

But one area where tax deductions are not allowed at all is entertaining. An individual can deduct food and drink – on an overnight business trip, for example – but cannot claim for wining and dining clients.

Expenditure on fixed assets, such as computers, are treated differently as they are eligible for capital allowances. So if, for example, you spend £1,000 on a computer, you cannot write it all off immediately. “It’s a capital expense,” says Mock. “You get what’s called capital allowances, which enable you to deduct a portion of expenses over a number of years against profits.”

There is a £50,000 annual investment allowance that allows capital expenditure of up to this amount on most assets (but not cars) to be written off.