If you're a sole trader and you pay for ChatGPT to do client work, you can claim ChatGPT as a business expense on your Self Assessment return. HMRC has no special rule for AI. It treats a ChatGPT Plus subscription the way it treats any software you pay for every month: as an allowable expense, taken off your profit before Income Tax and National Insurance are worked out. Claude, Gemini, Copilot and Midjourney follow the same rule.
Two things can change the answer. If you also use the same account for personal things, you can only claim the business share. And if you're an employee paying for ChatGPT out of your own pocket, you almost certainly can't claim it, however much it helps with the job.
Plus costs about £20 a month in the UK, which is £240 a year. Claimed in full, that saves a basic-rate taxpayer £62.40 and a higher-rate taxpayer £100.80. The figures here are for the 2026 to 2027 tax year and come from GOV.UK and HMRC's own manuals, checked in October 2026. It's general information about UK tax, not advice for your situation.
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Can I claim ChatGPT as a business expense? HMRC's rule
GOV.UK's list of allowable expenses for the self-employed puts software under office costs. Two kinds qualify: software your business uses for less than two years, and software "if your business makes regular payments to renew the licence", however long you keep it. A ChatGPT subscription is the second kind. You pay monthly or yearly, so it's a running cost you claim as an expense, not equipment you claim through capital allowances.
Underneath that list sits the test HMRC applies to every business cost. The money has to be spent wholly and exclusively for the business. HMRC's Business Income Manual explains that "wholly and exclusively" means your only purpose in paying was the business.
The law doesn't ask whether you needed the tool, or whether it was any good. A subscription you bought for the business and then barely used still counts. What it does ask is who the tool was working for, and that's where personal use comes in.
What claiming ChatGPT saves you
A sole trader pays two taxes on profit: Income Tax, and Class 4 National Insurance. An allowable expense lowers the profit, so it saves both. With the standard £12,570 Personal Allowance, the 2026 to 2027 rates in England, Wales and Northern Ireland are 20% Income Tax up to £50,270 of income (40% above that), plus Class 4 National Insurance of 6% on profits between £12,570 and £50,270 and 2% above.
Basic rate: £240 × (20% + 6%) = £62.40 saved
Higher rate: £240 × (40% + 2%) = £100.80 saved
On ChatGPT Pro at £200 a month (£2,400 a year), that's £624 at basic rate and £1,008 at higher rate.
So HMRC covers somewhere between a quarter and two-fifths of the bill. Scotland has its own Income Tax bands, so the saving there is a little different, but National Insurance is the same across the UK. To see the effect on your own bill, pick United Kingdom in our freelance tax estimator and add your subscriptions to your business expenses.
None of that makes a subscription free. You still pay most of the price yourself, so a plan has to earn its keep in time saved. For a quick way to check, see is it worth paying for AI?
Business and personal use: claim only the business share
Most people who pay for ChatGPT use the same account for everything. GOV.UK's rule for anything you use both ways is short: you can only claim the business costs. HMRC's manual adds that where a cost has a personal purpose, you can still claim a part of it that's used only for the business, as long as you can identify that part.
Put simply, HMRC will happily share the cost of the chatbot that drafts your client proposals. It's less keen to chip in for the one planning your stag do.
There's no set formula for splitting software, so pick a basis you could explain to HMRC without squirming: the share of your chats, projects or hours that are client work. If that comes to about 70%, you claim £168 of a £240 year. Use the same method every year and write down how you got the figure.
The cleaner option is two accounts. Pay for a work account from your business bank account, use it only for work and claim all of it. Use the free tier, or a second subscription you don't claim, for everything else.
Where ChatGPT goes on your Self Assessment return
On the short self-employment pages (SA103S), software goes in box 18, "Phone, fax, stationery and other office costs". HMRC's notes for the full pages (SA103F) list computer software in that category, which is box 23 there. If your turnover was under £90,000, you can skip the breakdown and put your total expenses in box 20. Online, you'll see the same categories without the box numbers.
If you use the full pages and enter the whole subscription in box 23, put the personal share in box 38, the box for disallowable office costs, so only the business part comes off your profit. On the short pages, just enter the business share.
Most sole traders use cash basis, which is now the standard method, so you claim the subscription in the tax year you paid for it. An annual plan paid in March counts in the year that ends on 5 April.
When the £1,000 trading allowance beats claiming expenses
Instead of claiming expenses, you can take the £1,000 trading allowance off your self-employed income. You can't have both: GOV.UK says you cannot claim expenses if you use it. So add up everything you could claim, ChatGPT included, and use whichever is bigger.
For a side business, the allowance often wins. Say you earn £3,000 from freelance design on top of a job, and your costs are £240 of ChatGPT and £300 of other software and supplies. That's £540 of expenses against a £1,000 allowance, so the allowance saves you more and ChatGPT doesn't need to appear on the return at all. Once your real costs pass £1,000, claim them instead.
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Can I claim ChatGPT for work if I'm an employee?
Usually not. GOV.UK says employees can claim tax relief only for things they "must buy" for the job and use only for work. The legal test, in section 336 of the Income Tax (Earnings and Pensions) Act 2003, is stricter still. HMRC's Employment Income Manual calls it "very restrictive": the cost has to be one that every person doing that job would have to pay, incurred necessarily, and wholly and exclusively in doing the duties.
ChatGPT fails the first part for almost everyone. A teacher who uses it for lesson plans is saving time, but plenty of teachers do the job without it, so it isn't a cost the job forces on you. The same goes for marketers, analysts and anyone else who pays for it because it makes the work faster. And if your employer already reimburses you, there's nothing left to claim.
The better route is to ask your employer to pay. A work tool your employer gives you to do the job isn't normally a taxable benefit, as long as your private use of it isn't significant. Since 6 April 2026 the same exemption applies when you buy it on your employer's behalf and they pay you back.
If you have a side business as well as a job, you can claim the side business's share of ChatGPT on your self-employment pages. The share you use for the day job stays personal.
Claiming ChatGPT through a limited company
If you trade through a limited company, you're not self-employed in HMRC's eyes, even if you're the only director. The company claims the subscription instead, as a running cost against its profits for Corporation Tax. The same wholly and exclusively test applies.
Corporation Tax is 19% on profits up to £50,000 and 25% above £250,000, with marginal relief in between. So £240 of ChatGPT saves the company £45.60 at the small profits rate and £60 at the main rate.
Two things keep this tidy. Subscribe in the company's name and pay with the company card, so the invoice and the cost both belong to the company. And keep personal use small. GOV.UK says anything you get personal use from must be treated as a benefit, and HMRC's exemption for work equipment and services depends on private use not being significant. If you also use ChatGPT for personal things, keep a separate account for them and pay for that one yourself.
How to get your ChatGPT invoice, and what records to keep
OpenAI keeps your invoices in its billing portal. For Plus or Pro, go to Settings, then Account, then Payment, then Manage, and download them from the Invoice History section. On a ChatGPT Business plan, a workspace owner finds them under the workspace settings, in Billing, then Invoices. If you subscribed through the iPhone or Android app, Apple or Google bills you instead, so the receipts are in your app store purchase history.
ChatGPT now bills UK web subscriptions in pounds. If you subscribed before that, OpenAI keeps you on your original currency, so you may still be charged in dollars. In that case, record the sterling amount that left your bank or card account.
Keep the invoices, your bank or card statements, and a short note of what you use ChatGPT for and how you worked out any business share. HMRC asks you to keep records for at least five years after the 31 January filing deadline for that tax year.
US readers face a different set of rules, with their own forms and their own line numbers. They're covered in are AI subscriptions tax deductible?
Frequently asked questions
Is ChatGPT tax deductible in the UK?
Yes, if you're self-employed or run a limited company and use it for the business. HMRC counts a software subscription as an allowable expense, so it comes off your profit before tax. If you also use it personally, claim only the business share.
Can I claim ChatGPT on my tax return if I'm employed?
Almost never. Employees can only claim for costs that every person doing the job would have to pay, and almost no job requires ChatGPT. Ask your employer to pay for it or reimburse you instead. That isn't normally a taxable benefit if it's for work and private use isn't significant.
Can I claim Claude, Gemini or Copilot the same way?
Yes. HMRC's rule covers any software you pay for regularly, so a Claude, Gemini, Copilot or Midjourney subscription is claimed exactly like ChatGPT, in the same box and with the same business-share rule. List them together as software subscriptions.
Should I use the £1,000 trading allowance instead?
Only if your total expenses, ChatGPT included, come to less than £1,000. You can take the allowance or claim expenses, not both. For a small side business the allowance often wins, and then ChatGPT doesn't go on the return at all.