The self-employed are often concerned as to whether an expense is allowable for tax purposes. As a general rule, the self-employed can deduct running costs of the business when working out their taxable profit as long as the expenses are classed as ‘allowable expenses’. In this article, we briefly look at the rules for claiming expenses relating to claiming legal and financial costs.
HMRC provides the following guidance on the matter.
Accountancy, legal and other professional fees can count as allowable business expenses.
You can claim costs for:
- hiring of accountants, solicitors, surveyors and architects for business reasons
- professional indemnity insurance premiums
You can’t claim for:
- legal costs of buying property and machinery – if you use traditional accounting, claim for these costs as capital allowances
- fines for breaking the law.
If you are unsure if a cost of this type can be claimed please call us for clarification.