Claiming legal and financial costs

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.

Planning note

If you are unsure if a cost of this type can be claimed please call us for clarification.

Posted in Income Tax

Exeter Accountant MJ Smith & Co

Celebrating 25 years of excellence.

Free 1st Meeting
Fixed Fees
Free Support!

Find out more

Client Portal Login

Forgot Password?

Latest News

Emails and letters from HMRC

HMRC continues to warn taxpayers about email phishing scams. Phishing emails are used by fraudsters to access recipients’ valuable personal …
Read More

Childcare voucher scheme issues

The Tax-Free Childcare Scheme (TFCS) was launched in April 2017 and opened to all remaining eligible families with children under …
Read More

Fixtures and fitting on transfer of ownership

The tax treatment of the sale of fixtures and fittings included in the sale or purchase of a commercial building …
Read More

Twitter Feed