Can I claim expenses for business-related accounting or bookkeeping advice?

Can I claim expenses for business-related accounting or bookkeeping advice?

Paying for accounting or bookkeeping advice is one of those business costs that often feels “obviously business-related,” yet it can still cause uncertainty when it’s time to work out what you can legitimately claim. That uncertainty is understandable. Accounting support can range from everyday bookkeeping help to complex tax planning or even personal finance guidance that happens to be delivered by the same adviser. The good news is that, in many situations, the cost of professional advice that is genuinely for your business can be treated as an allowable business expense. The key is understanding what counts as a business expense in practice, how to separate business from personal benefit, and how to keep records that make your position clear.

This article explains how business-related accounting and bookkeeping fees are typically treated, what kinds of advice are more likely to be allowable, where the grey areas sit, and what practical steps you can take to maximise clarity and minimise risk. It’s written to be useful whether you’re a sole trader, a limited company director, or running a partnership, because the principles are similar even though the mechanics can differ.

What does it mean to “claim expenses” for advice?

When people ask whether they can “claim” accounting or bookkeeping costs, they usually mean one of two things:

First, they might mean whether the cost can be deducted from business income when calculating taxable profits. In this case, claiming an expense reduces the profit figure you pay tax on, because the expense is treated as part of the cost of running your business.

Second, they might be thinking about whether the expense can be paid from the business rather than from personal funds, particularly if they operate through a limited company. In a company context, the business paying the invoice is often fine if the cost is wholly and exclusively for the business, but if it relates to personal tax or personal financial matters the position becomes more complicated.

In both situations, the underlying question is the same: is the fee a legitimate business cost, and can you show that it is business-related rather than personal? If you can, it’s usually claimable. If you can’t, then it may be disallowed, partly allowable, or potentially treated as a personal expense or benefit.

Why accounting and bookkeeping advice is usually a business expense

Most businesses need to keep records, maintain accounts, and comply with tax obligations. Even very small operations often require help with one or more of the following: choosing a bookkeeping method, keeping track of income and expenses, preparing accounts, submitting tax returns, payroll, VAT, and reporting requirements. If you pay a professional to help with these tasks, you are paying to meet a business need. That tends to fall squarely within what most people think of as normal day-to-day running costs.

In practical terms, professional fees for services like bookkeeping, preparing accounts, preparing and filing business tax returns, payroll administration, VAT returns, and routine tax compliance advice are commonly treated as allowable. They are not capital assets like machinery or a long-term property improvement; they are recurring operational costs that exist because the business exists.

However, “usually allowable” is not the same as “always allowable.” Accounting advice can sometimes include personal elements, or relate to setting up or restructuring a business, or involve tax planning with long-term implications. That’s where you should be more careful.

Common claimable accounting and bookkeeping costs

To make this concrete, here are examples of fees that are commonly treated as business expenses when they relate to your trading activities:

Bookkeeping services. If you pay someone to keep your books up to date—recording sales, reconciling bank transactions, categorising expenses, producing basic reports—this is typically a straightforward business cost.

Preparation of annual accounts. Fees for preparing profit and loss accounts, balance sheets, and related statements for your business are generally part of running the business.

Business tax return preparation. If you pay a professional to prepare your business tax return (or the business component of a return), that fee is normally business-related.

VAT returns and VAT compliance. Advice and preparation services related to VAT registration, VAT return filing, VAT inspections, and VAT record-keeping are commonly claimed as business expenses.

Payroll services. Running payroll, calculating PAYE and National Insurance (where relevant), providing payslips, and filing payroll reports are classic compliance services and typically allowable for the business.

Software setup and bookkeeping systems advice. If an adviser helps you set up an accounting system, chart of accounts, invoicing routine, or expense management approach that’s used for your trade, that is usually a business expense.

Ongoing business tax advice. Guidance on how to treat certain business expenses, how to recognise income, how to keep compliant records, and other operational tax matters usually relates to business operations.

Dealing with business enquiries or compliance checks. If you pay an accountant to respond to questions from the tax authority about your business, or to support you through a business audit, that is generally business-related.

This list is not exhaustive, but it gives a sense of the pattern: if the advice is about running the business, keeping records, and meeting business tax obligations, it tends to be allowable.

Where it gets tricky: personal tax and mixed-purpose advice

The main complication with accounting and bookkeeping fees is that many advisers provide a blend of business and personal services. A single invoice might include preparing your business accounts, your personal tax return, advice about dividends, and guidance on your mortgage affordability. Some of that is business-related, and some of it is not.

When the service provides both business and personal benefit, you need to consider whether you can separate the cost into business and non-business portions. In many cases, you can, and you should. The practical approach is to ask the accountant or bookkeeper to itemise the invoice or provide a breakdown of what relates to the business.

For example:

Personal tax return preparation. If you are a sole trader, your “business tax” is often part of a personal tax return, because the profits are taxed on you personally. Even so, only the portion of the work relating to your business accounts and business profit calculation is typically treated as a business expense. The part relating to personal income, investments, or other private matters is personal.

Director’s personal tax return. If you run a limited company, the company may pay for your personal tax return preparation, but this can create a personal benefit issue because the service is for you as an individual. Some businesses still do this, but the tax and reporting treatment can be more complex than simply “claim it.” A cleaner approach is often to keep personal tax return fees separate and pay them personally, unless you have clear advice that your situation supports a different arrangement.

Advice about dividends and salary. This is a grey area. Advice about the most tax-efficient way to pay yourself can be closely tied to the company’s payroll and compliance, but it also has a personal tax angle. Where possible, ask for the fee to be broken down into business compliance work versus personal tax planning work.

Private finance guidance. If an accountant gives you advice about investments, pensions unrelated to the business, personal budgeting, or other non-business decisions, it’s personal and should not be treated as a business expense.

The point is not that these services are “wrong” or “bad.” It’s simply that not all professional fees are business costs, even if they come from the same professional who handles your business bookkeeping.

Startup and one-off setup fees

Another area that often raises questions is startup expenditure and business setup advice. New businesses often pay for early-stage support: choosing a structure, registering for taxes, setting up accounting systems, building a chart of accounts, and deciding on software. Is that claimable?

In many cases, early accounting and bookkeeping setup costs are still linked to trading activity. If the purpose is to get the business ready to operate and keep records, the cost can be connected to running the business rather than creating a long-term asset. That said, setup fees can sometimes be treated differently if they relate to forming a company or creating a capital structure. The treatment can depend on the nature of the service and whether it is considered revenue (day-to-day) or capital (creating or improving something enduring).

For practical purposes, you can often reduce uncertainty by asking your accountant to describe the service clearly on the invoice. For example, “bookkeeping system setup and training” is more clearly an operational cost than “corporate restructuring and share capital planning.” The more specific and business-operational the description, the easier it is to justify as a business expense.

Tax planning versus tax compliance

Accounting fees are not all the same. There is a spectrum from routine compliance to proactive planning and strategy. Compliance work includes preparing accounts, filing returns, payroll, and ensuring records meet required standards. Planning work includes structuring transactions, choosing remuneration approaches, timing income and expenses, and sometimes designing arrangements intended to reduce tax.

In general, fees for legitimate business tax planning can still be business expenses if the advice is directly connected to your trade and the way the business operates. However, planning can also drift into areas that provide personal benefit, especially when the planning relates to the owner’s personal tax position, asset ownership, or long-term private wealth management.

The safest approach is to keep a clear line: treat fees that exist because the business must comply as business expenses; treat fees that exist primarily to manage your private tax and wealth position as personal; and where an engagement includes both, split the cost with a clear, documented allocation.

Limited company, sole trader, or partnership: does it change the answer?

The broad principle—claim costs that are for business purposes—stays the same, but the way you apply it can differ depending on your business structure.

Sole traders

If you operate as a sole trader, you and the business are not legally separate entities in the same way a limited company is. You are taxed on the business profits personally. This can make it feel natural to treat accountant fees as a single expense, but it’s still helpful to separate business-related work from purely personal tax matters. If your accountant prepares a personal tax return that includes your trading profits, you may be able to claim the portion of the fee that relates to calculating and reporting your business results. If the same return includes rental income, investment income, or other non-business matters, that portion is personal.

From a practical record-keeping standpoint, it is worth asking for an invoice that indicates what relates to the business and what relates to personal tax matters. This makes it easier to defend if questions arise, and it reduces the chance of accidentally claiming more than you should.

Limited companies

A limited company is a separate legal entity. It can pay for services it receives, and it can claim allowable expenses against its profits. Accounting fees for preparing company accounts, corporation tax returns, VAT, payroll, and bookkeeping are typically business expenses of the company.

The complication arises when the company pays for services that are really for an individual—such as a director’s personal tax return. In that case, the fee may be treated as a personal benefit provided by the company rather than a company expense incurred wholly for business purposes. Even if the company pays it, the tax treatment might require extra reporting or create tax consequences for the individual. Because the consequences can vary based on facts and local rules, many business owners choose to pay personal tax return fees personally unless there is a clear business reason and the reporting has been considered properly.

Where an engagement involves both the company’s work and the director’s personal tax, it is usually best to split invoices so the company pays for company work and the individual pays for personal work. It’s a simple step that can prevent confusion.

Partnerships

Partnerships often have their own accounts and reporting needs, alongside personal tax obligations for the individual partners. Similar to sole traders, the partnership can typically claim expenses that relate to the partnership’s trade. But personal tax return work for partners is not automatically a partnership expense. A breakdown is helpful, especially when the accountant provides services to both the partnership and individual partners.

What about bookkeeping training and coaching?

Not all bookkeeping support is “done for you” work. Some businesses pay for training, coaching, or advisory sessions where the goal is to help the owner (or a staff member) understand bookkeeping processes, learn an accounting software package, or improve financial reporting.

These costs are often claimable when they are genuinely about improving business record-keeping and financial administration. For example, training on how to reconcile accounts, how to run payroll correctly, or how to keep VAT records can be tightly tied to running the business. The important factor is the purpose: if it’s training to run the business better, it looks like a business expense.

However, training that is broad, personally transferable, or not clearly linked to the business can be more contentious in some contexts. The more you can show that the training is required for the business role and is intended to maintain or improve current business capability, the stronger the business connection tends to be.

Costs related to raising finance, selling a business, or buying assets

Accounting advice sometimes arises during big events: seeking investment, applying for a loan, buying a major asset, or selling the business. These situations can involve due diligence, forecasting, valuation work, or transaction support.

These fees can be more likely to be treated as capital or as relating to the structure of the business rather than routine operations. If a fee is incurred to acquire a long-term asset or to sell the business, it may not be treated the same way as regular bookkeeping. Instead, it might be treated as part of the cost of the transaction. The precise treatment can be technical, and it’s one of the areas where taking specific advice is sensible.

Even without diving into complex rules, a simple way to think about it is: if the advice helps you run the business day to day, it’s more likely to be a normal expense; if it relates to buying or selling something substantial, changing ownership, or raising capital, the treatment may be different.

Home office, travel, and “extra” charges billed by your accountant

Sometimes, what you pay your accountant is not just a flat fee for “accounts.” You might see separate line items for travel to your premises, meetings, printing, postage, or software subscriptions. Whether these are claimable depends on whether the underlying work is business-related.

If the accountant’s travel was to meet you about business bookkeeping or accounts preparation, then the travel cost is part of the business service. If the meeting was primarily about your personal finances, the travel cost might be personal.

Similarly, if the accountant charges you for software access that is used for business bookkeeping, that cost may be a business expense. If they charge for a portal that includes personal tax filing and private data management, you may need to consider whether the cost is partly personal.

As a practical step, review invoices for line items that are not obviously “accounts preparation” and ask for clarity where needed. A clear invoice description can do a lot of heavy lifting.

What records should you keep to support the claim?

Claiming an expense is not just about being entitled in principle; it’s also about being able to show why you claimed it. Good records reduce stress and help you respond quickly if you need to explain your figures.

Here are the practical records that help most:

Invoices that describe the service. The invoice should ideally state what was done: bookkeeping for a period, preparation of accounts, VAT returns, payroll, business tax advisory meeting, and so on. A vague invoice that just says “professional services” is more difficult to support than one that is specific.

Engagement letters or contracts. Many accountants provide an engagement letter that lists the services included. Keeping a copy helps show the purpose of the fee.

Email correspondence or meeting notes. If a piece of advice could be questioned as personal versus business, a short email that summarises “We discussed VAT registration thresholds for the business” can make the purpose clear.

Proof of payment. Bank statements or payment confirmations are basic but essential, particularly for digital services.

Allocations for mixed services. If you split a fee between business and personal components, keep the breakdown and how you arrived at it. Ideally, have the accountant provide it, but even your own documented allocation can be helpful if it is reasonable and consistent.

How to handle mixed invoices in a clean, defensible way

Mixed invoices are common, especially for owner-managed businesses. Here is a practical approach that keeps things tidy:

1) Ask for itemisation. When you know a service includes both business and personal work, ask the accountant to split the invoice into separate line items. Many accountants will do this routinely if requested.

2) Split invoices entirely where possible. An even clearer approach is to have two invoices: one billed to the business for business services, one billed to you personally for personal tax or private services. This is often the cleanest from a record-keeping perspective.

3) Be consistent year to year. If you choose an approach—such as claiming only the business accounts portion—apply it consistently. Sudden changes without explanation can make your records look less reliable.

4) Keep the reasoning short and specific. If you do your own allocation, write down a short note: “Invoice includes business accounts preparation (£X) and personal tax return (£Y). Only business portion claimed.” That single sentence can save time later.

What if the advice helps both the business and you personally?

Some advice genuinely benefits both the business and you as the owner. For example, choosing a remuneration strategy may affect the company’s payroll, the company’s tax position, and your personal tax. In these cases, it can feel artificial to split the cost.

Nevertheless, the safest route is usually to identify the dominant purpose of the advice and split if there is a meaningful personal component. If the advice is primarily about the company’s compliance obligations and payroll arrangements, it may be easier to treat it as a business cost. If it is primarily about optimising your personal tax or wealth, it may be more appropriate to treat it as personal. Where the work is genuinely blended, an agreed split with a clear invoice breakdown is typically the most defensible solution.

Think of it less as a test of perfection and more as a test of reasonableness. Can you explain, with a straight face and simple evidence, why the business paid this fee and why the amount you claimed is appropriate? If yes, you are in a much stronger position.

How to avoid common mistakes when claiming professional fees

Here are common errors business owners make with accounting and bookkeeping fees, and how to avoid them:

Claiming the full fee when it includes personal work. If the invoice includes personal tax return preparation or other private services, claim only the business portion or split the invoice.

Paying personal fees from the business without considering consequences. For limited companies especially, personal services paid by the company can create complications. Splitting and paying personally is often simpler.

Not keeping the invoice or losing the service description. Keep digital copies of invoices and engagement letters. If the invoice is vague, ask for a clearer description.

Classifying everything as “accountancy” without tracking what it was. Your bookkeeping categories can be simple, but it still helps to store the details. Many accounting systems let you attach the invoice and notes to the transaction.

Forgetting smaller related costs. Bookkeeping software subscriptions, payroll tools, and expenses for business financial admin can be legitimate business costs too. Don’t claim things you’re not entitled to, but don’t overlook genuine business administration costs either.

Practical examples to help you decide

Sometimes it’s easiest to see how this works through examples. Here are a few scenarios and the practical conclusion that often follows:

Example 1: Monthly bookkeeping and quarterly VAT returns. You pay a bookkeeper a monthly fee to reconcile accounts and prepare quarterly VAT returns. This is routine business record-keeping and compliance. It is typically a straightforward business expense.

Example 2: Year-end accounts plus personal tax return. Your accountant charges a single annual fee that covers preparing business accounts and preparing your personal tax return. You ask them for a split: the portion relating to business accounts is claimed as a business expense; the personal return portion is treated as personal.

Example 3: One-off advice on whether to register for VAT. You pay for a consultation about VAT registration thresholds, pros and cons, and compliance requirements. This advice relates to your trading activity and is typically business-related.

Example 4: Mortgage reference letter and personal affordability discussion. Your accountant charges you for a letter to support a mortgage application and discusses your personal income. Even if your income comes from the business, the purpose is personal. This is typically not a business expense.

Example 5: Company restructuring and share issuance advice. You pay for complex advice on reorganising a company structure and issuing shares. This may be treated differently from routine expenses because it relates to capital structure. It’s an area where you should expect special treatment and keep detailed documentation.

Example 6: Software training for your staff member. You pay for training sessions to teach a staff member how to use your accounting software to produce accurate invoices and reconcile accounts. This looks like a business administration and capability cost and is commonly treated as business-related.

How to talk to your accountant about claimable fees

If you want to handle this neatly, it helps to be upfront with your accountant or bookkeeper. You don’t need to be confrontational or overly technical. A simple request usually works:

Ask them to itemise invoices where services include both business and personal work. Ask them to state the period covered and the type of service provided. If you run a limited company, ask them to bill personal tax return work to you personally and company work to the company.

This can also be an opportunity to clarify what is included in your service package. Some firms bundle services in a way that makes splitting harder; others are happy to separate. If you care about keeping business and personal costs distinct, tell them early so the paperwork matches your needs.

What if you’ve claimed incorrectly in the past?

If you look back and suspect you’ve claimed accountant fees that included personal work, don’t panic. The practical next step is to improve the approach going forward by splitting invoices and making allocations clearer. If the amounts are significant, or if you are concerned that past treatment could be materially wrong, it can be sensible to discuss it with a professional who can look at the specifics and advise on whether an adjustment is appropriate.

For many people, the biggest win is simply to tidy up the process now: get clearer invoices, split personal and business charges, and keep better documentation. That reduces the risk of repeating the same issue and makes future record-keeping much easier.

Key takeaways

Accounting and bookkeeping advice is often a legitimate business expense because it supports record-keeping, compliance, and the day-to-day operation of a business. The main exceptions and complications arise when the advice is personal, when an invoice mixes personal and business services, or when the work relates to capital or structural changes rather than routine trading activity.

If you want a simple rule of thumb: claim fees that exist because your business exists and needs to keep records or meet obligations. Don’t claim fees that are primarily about your private life or personal wealth. And when the service overlaps, split it in a way you can explain and document.

By asking for itemised invoices, keeping engagement letters and proof of payment, and writing short notes for any mixed allocations, you can usually claim what you are entitled to while keeping your records clean and defensible. That way, professional advice remains what it should be: a tool that helps your business run smoothly, rather than a source of uncertainty when it’s time to calculate your taxable profits.