Accountancy, legal and professional fees: what you can claim

The fees you pay to the professionals who keep your business straight — accountants, solicitors, surveyors — go here. Most are deductible, but the exceptions (capital work, fines, personal matters) trip people up every single year.

What you can claim

• Accountancy fees — bookkeeping, payroll, accounts and the business side of your tax return.
• Tax advice and enquiry support — help with HMRC questions about your business.
• Legal fees on business matters — chasing a debt through the courts, drafting customer contracts, employment disputes, registering a trademark.
• Professional body membership — subscriptions you need to do your work; check HMRC's approved list.
• Trade association fees — belonging to the body for your trade.
• Surveyor and valuation fees — for business purposes, not property purchases.
• Debt collection agency fees — for chasing business debts.
• Payroll bureau charges — if someone runs your payroll for you.

What you can't claim

• Legal fees on buying property or major equipment — capital costs, added to the asset's value.
• HMRC penalties and fines — never deductible, whatever they relate to.
• Personal legal work — divorce, buying a house, writing a will.
• Costs of setting up or incorporating a company — capital, not a running cost.
• Interest and penalties on late tax payments — always disallowed.

Common mistakes

One bill often covers business and personal work — an accountant who does your sole trader accounts, a rental property and your personal investments. Ask for the invoice to be split, and claim only the business share in this category. Guessing the split is risky; a figure from your accountant takes one email.

Penalties turn up here more often than you would think. People feel a late filing penalty is a cost of doing business, but HMRC will not allow it — and a penalty inside your quarterly expense totals means those totals are simply wrong. Keep penalties out, or log them with a clear "not claimable" note.

Finally, don't forget the smaller claims: the debt collection agency that recovered £600, the solicitor's letter that got a customer to pay. They all belong here and all reduce your taxable profit.

How to record it in your MTD tracker

Select Accountancy, legal and professional fees and note which professional the payment went to and what it covered. For unusually large legal cases, keep the paperwork and flag it for your accountant — some legal costs are capital.