It’s a question more and more people are asking. And it’s a fair one.
If you’re using an AI tool like ChatGPT to help run your side hustle — drafting content, answering customer queries, generating ideas — are you allowed to put that subscription cost against your tax bill?
The short answer is: possibly, yes. But with an important condition.
The golden rule for business expenses
HMRC’s rule for allowable expenses is consistent. You can deduct costs that are incurred wholly and exclusively for business purposes. (HMRC — Expenses if you’re self-employed)
If you use a ChatGPT subscription purely for your side hustle — writing product descriptions, handling customer correspondence, producing content — then a strong case exists for claiming it as an allowable business expense.
What if you use it for personal reasons too?
This is where the rule requires some care. If you use the same subscription for both business and personal purposes, HMRC’s approach is that you can only claim the portion that relates to business use. (HMRC — Expenses if you’re self-employed)
HMRC gives a clear parallel example: if your total phone bill is £200 but £70 relates to business calls, you can claim £70 as a business expense. The same logic applies to any subscription or tool with a dual personal and professional use.
So if you use ChatGPT roughly half the time for business, it’s reasonable to claim half the subscription cost.
What other digital costs might be claimable?
HMRC’s guidance covers a range of digital and office expenses. Relevant examples for side hustlers include website costs, advertising costs, software subscriptions used for your business, and a proportion of your internet bill if you use it for work. (HMRC — Expenses if you’re self-employed: marketing, entertainment and subscriptions)
Keep a record
Whatever expenses you intend to claim, keep a clear record. Note what the cost was, what it was for, and what proportion related to business use. HMRC may ask you to evidence your claims, and good records make that straightforward. (HMRC — Expenses if you’re self-employed)
One final point
Claiming expenses only makes sense if you have income to declare. If your total trading income is £1,000 or below and you’re using the trading allowance, you cannot also claim expenses — it is one approach or the other. If your costs are significant, it may be worth calculating whether declaring income and claiming expenses leaves you better off than relying on the allowance.
The tax system is designed to tax your profit. Understanding what counts as a legitimate business cost is one of the most practical things any side hustler can do.
Use our free UK side hustle tax calculator to see whether claiming expenses or using the trading allowance gives you the better result.