Can I claim expenses for business-related backups, data recovery, or IT support?

Understanding the question: what counts as “business-related” IT help?

Backups, data recovery, and IT support sit in a slightly awkward corner of business expenses. They can feel like “just technology,” but from a tax perspective they are usually about something more fundamental: protecting the ability of your business to operate, safeguarding business records, and maintaining the tools you use to generate income. That makes them highly likely to be deductible in many situations. Still, the answer to “Can I claim these expenses?” is not a simple yes-or-no, because the details matter: what you purchased, why you purchased it, how you use it, and whether it has a personal element.

In most tax systems, the broad rule is that an expense is claimable if it is incurred wholly and exclusively for business purposes (or, in some jurisdictions, “ordinary and necessary” for the trade). Backups, recovery services, and IT support often meet that standard when they relate to business devices, business data, and business operations. But there are common tripwires: mixed personal use of computers and phones, one-off upgrades that count as capital expenditure rather than day-to-day running costs, and the temptation to claim everything connected to “tech” even when it is partly lifestyle or convenience.

This article explains how to think about these costs, how different types of backup and recovery spending are usually treated, what evidence to keep, and how to handle mixed-use devices. It also covers the difference between repairs and improvements, subscriptions and one-time purchases, and the special case of data recovery after a loss or cyber incident.

Backups: what you’re paying for and why it is often deductible

A business backup is not just a nice-to-have. If your business depends on digital records—client files, invoices, contracts, emails, project assets, creative work, code repositories, inventory data, booking records, or accounting files—then backup spending can be a direct cost of protecting revenue generation and meeting record-keeping obligations. Even if you are a sole trader or a tiny company, the practical reality is the same: losing key data can shut down operations, delay billing, trigger customer refunds, create legal risks, or cause reputational harm.

Common backup-related expenses include cloud storage subscriptions, dedicated backup services, external hard drives, network-attached storage (NAS) devices, backup software, encryption tools, offsite storage services, and the labour cost of a technician setting up or maintaining the system. Many businesses also pay for versioning features, retention policies, ransomware protection, or additional storage tiers to keep backups immutable or otherwise resistant to tampering. In most cases, where these are used for business purposes, they will fall into a category similar to general IT running costs and may be claimable.

However, the category matters. A recurring cloud backup subscription is typically treated like an operating expense. A one-time purchase of hardware (like a NAS or multiple external drives) may be treated as equipment, which may be claimed differently depending on the rules for capital assets in your jurisdiction. Even if the cost is claimable, the method may differ: it might be deductible immediately if it is small, it might be depreciated over time, or it might be covered by a simplified allowance scheme. The key is that “claimable” and “immediately deductible” are not always the same thing.

Cloud backup and storage subscriptions: straightforward, with a mixed-use caveat

Cloud backup is usually sold as a subscription: you pay monthly or annually, storage scales with usage, and you get a defined set of features. From a practical bookkeeping standpoint, these are among the easiest backup costs to handle because they are routine, well-documented, and clearly connected to ongoing operations. The invoice or receipt often spells out the service name, the period it covers, and the amount charged.

If the subscription is used wholly for business data—your business laptop backups, your business file repository, your business email archive—then the argument for claiming the cost is generally strong. The claim becomes more complicated when the same subscription backs up personal photos, family devices, or non-business projects. This is common with a single storage plan that covers multiple devices in a household.

When you have mixed use, the most defensible approach is apportionment: claim the business portion and exclude the personal portion. Apportionment can be done by device count (for example, one business laptop out of three devices), by storage usage (if the platform reports how much storage each folder or device consumes), or by a reasonable estimate supported by consistent logic. The most important thing is that your method is reasonable and repeatable. If your mix changes, update the apportionment to reflect reality.

Backup hardware: external drives, NAS devices, and “is this capital?”

Hardware purchases are where many people get tripped up. If you buy an external hard drive to keep a mirror of your accounting files and client data, the purpose is business-related. But the tax treatment may depend on whether it is considered a capital asset. Generally speaking, equipment that has an enduring benefit (something you use over multiple years) tends to be capital, while short-lived or purely consumable items tend to be revenue expenditure. External drives and NAS devices often sit in the “enduring benefit” bucket, but many tax systems allow immediate deduction for low-cost equipment or provide simplified methods for small businesses.

What does that mean for you? It means you may still be able to claim the cost, but you might have to claim it via depreciation or a specific allowance rather than deducting it all at once. If you’re using accounting software, it’s helpful to set up categories such as “Computer equipment” or “IT hardware” for these purchases. If your system supports it, record the asset details: purchase date, cost, and what it is used for. That makes it easier to apply the correct treatment later.

Mixed use matters here too. If you use the same drive to store personal backups and business backups, you may need to apportion the claim. The most robust solution is to keep business backups segregated—separate drives, separate folders, separate accounts—so the business purpose is clear and the apportionment is either unnecessary or very easy to prove.

Backup software: one-off purchases vs subscriptions

Backup software often comes in two styles: subscriptions (ongoing payments) and perpetual licences (one-off purchase, sometimes with optional maintenance). Subscriptions are usually treated as operating expenses. One-off licences can be operating or capital depending on local rules and on how substantial and enduring the benefit is. In practice, many small businesses treat modest software costs as normal business expenses; larger software acquisitions are more likely to be treated as capital or as intangible assets.

The “business-related” argument is typically straightforward if the software is used to protect business data. If you want to make your claim simpler and cleaner, keep documentation of why you acquired it: a short note in your bookkeeping system such as “Backup software for business laptop and client files” can help later if you ever need to recall the purpose of the purchase.

Data recovery: when things go wrong and what you can usually claim

Data recovery costs are often high and emotionally charged. You lose files, a drive fails, a system gets corrupted, or ransomware hits, and suddenly you are paying hundreds or thousands for specialists to retrieve data or restore systems. The good news is that data recovery is often easier to justify than some other technology spending because it is so directly connected to restoring business operations and recovering business records.

Typical data recovery expenses include lab recovery services for damaged drives, emergency IT callouts, restoration of corrupted databases, forensic imaging, ransomware decryption and restoration work (where lawful and feasible), replacement of failed storage media, and additional services like rebuilding a server or reconfiguring a workstation after recovery. If the recovery relates to business data or business devices, these costs are commonly treated as deductible business expenses.

There are still caveats. If the recovery relates to a personal device or personal data, it is not a business expense. If the recovery is for a mixed-use device, you should consider apportionment. If the recovery costs include replacing or upgrading hardware significantly beyond restoring the previous capability, part of the spending may start to look like a capital improvement rather than a repair. Separating the invoice lines—recovery service vs new equipment—can make your bookkeeping much cleaner.

Repairs vs improvements: the difference that can change how you claim

When you pay an IT professional, you may think you are paying for “a fix.” But from an accounting and tax perspective, there can be a meaningful difference between repairing something to restore it to its prior working condition and improving or upgrading something to a better standard than it previously had.

Repairs and maintenance are typically treated as operating expenses: you are keeping the business asset functional. Examples might include reinstalling a corrupted operating system, replacing a like-for-like drive that failed, restoring backups, removing malware, or troubleshooting a network that stopped working.

Improvements may be treated as capital: you are enhancing the asset beyond its original state. Examples might include migrating from a simple backup drive to a full NAS with redundancy and remote access, upgrading a server significantly, or installing a new enterprise-grade security suite that materially changes the capability of your systems. This does not necessarily mean you cannot claim the cost; it may simply affect whether it is claimed immediately or over time.

In real life, invoices can include both. A technician might recover data (repair-like) and then recommend and install a more robust solution (improvement-like). If you can, ask for itemised invoices so you can clearly allocate spending to the correct category.

IT support: subscriptions, retainers, and ad hoc fixes

IT support is broad. It can mean a managed service provider (MSP) on a monthly retainer, a freelancer who bills by the hour, or a one-off callout when something breaks. It can include help desk services, network monitoring, security patch management, device setup, email migrations, troubleshooting, training, and ongoing maintenance. When the support relates to your business operations, it is usually a classic example of a claimable cost: it exists to keep the business running.

Routine IT support costs are often treated as operating expenses. This includes monthly support contracts, hourly labour for troubleshooting, or annual maintenance fees. If you run a limited company, these may be recorded as professional services or IT services. For sole traders, they typically sit in categories like “Repairs and maintenance,” “Office expenses,” or “Professional fees,” depending on your chart of accounts.

Where you need to be careful is when IT support includes the purchase of hardware or significant upgrades. If the IT provider purchases equipment on your behalf, you may have both a service component and an equipment component. Treating everything as “IT support” can blur the picture and make it harder to apply the correct tax treatment. Ideally, record the service fees separately from equipment purchases.

Cybersecurity support and incident response: generally business-related, but document the event

Many businesses now pay for security tools and services: antivirus suites, endpoint protection, firewall subscriptions, password managers, security audits, vulnerability scans, and incident response retainers. They also pay for emergency response when something happens: ransomware cleanup, account recovery, identity verification steps for business accounts, or rebuilding systems after a breach.

These expenses are commonly business-related when they protect business systems and data. They can also be linked to compliance obligations if you handle sensitive customer information. If you claim these costs, keep documentation that shows the link to the business: what systems were protected, what incident occurred (if any), and what the provider did. You do not need to keep sensitive details in your bookkeeping notes, but a simple “Incident response for business email compromise” or “Security audit for client data environment” can help establish purpose without oversharing.

Home offices and mixed-use devices: the most common reason claims get messy

Many people run a business from home and use the same laptop, phone, router, and storage accounts for both business and personal life. That’s normal, but it means you must treat expenses carefully. When an item or service is used partly for personal use, you usually cannot claim 100% of the cost as a business expense. Instead, you claim the business-use proportion.

For backups, mixed use might look like a single cloud plan backing up your business laptop and your family’s phones. For IT support, it might look like a technician fixing your home Wi-Fi where you sometimes work. For data recovery, it might look like recovering a drive that contains both client work and personal photos.

Apportionment is your friend. Choose a basis that is reasonable and supported by evidence. For a laptop, you might apportion based on the percentage of time the device is used for business. For cloud storage, you might apportion based on storage usage. For Wi-Fi support, you might apportion based on business use of the internet connection if your tax rules permit it. The simplest and most defensible approach is to separate business and personal as much as possible: a dedicated business device, a dedicated business backup account, and business-specific support invoices.

Examples: when backup, recovery, and IT support are usually claimable

To make this more concrete, here are examples of situations where claiming these costs is commonly defensible:

1) You pay a monthly cloud backup subscription for your business laptop and client project folder. The subscription exists to protect work product and business records. If it is purely business use, you typically claim it in full.

2) You buy an external drive used exclusively for business backups and store it offsite. The purpose is to protect business records. You may be able to claim it, though it might be treated as equipment depending on local rules and cost thresholds.

3) You hire a specialist to recover your accounting database after corruption, allowing you to complete invoicing and tax reporting. The service is directly linked to business operations and record-keeping. It is usually a deductible business cost.

4) You pay an IT provider to set up automatic backups, configure retention policies, and test restores quarterly. This is maintenance and operational support, commonly treated as a normal business expense.

5) You pay for an incident response service after a malware infection on your business device, including cleanup and restoring data from backups. This is usually a claimable expense because it is about restoring business capability and protecting business data.

Examples: when the claim is questionable or needs apportionment

Here are situations where you should pause, apportion, or avoid claiming altogether:

1) You pay for a large cloud storage plan mainly for personal photos and videos, with only a small amount of business data included. Claiming the full cost would be hard to justify; a proportionate claim might be reasonable if you can support it.

2) You recover data from a personal phone that contains mostly personal content, with minimal business use. Claiming the recovery as a business expense is likely inappropriate unless you can clearly show it relates to business data and business activity.

3) You pay a technician to upgrade your home entertainment network and also “make the office Wi-Fi faster.” If the work is largely personal, it is not a business expense. If a portion is genuinely for business use, you need clear evidence and apportionment.

4) You buy a premium NAS and additional drives primarily to run a home media library, but you also store some business files on it. Claiming the full cost as business spending would be difficult. A partial claim might be possible but is often more trouble than it is worth unless business use is substantial and well documented.

What records should you keep to support these claims?

Technology expenses can be misunderstood by auditors or even by your future self. Good records make everything easier. At minimum, keep:

Receipts and invoices: Include the supplier name, date, amount, and description. For subscriptions, keep the invoice for each billing period or the annual receipt.

Proof of payment: Bank or card statements that match the invoice totals.

A short business-purpose note: In your accounting system, add a brief memo like “Cloud backup for client files” or “Data recovery for business laptop.”

Apportionment support (if mixed use): A screenshot of storage usage, a note about device allocation, or a consistent log of business-use percentage.

Itemised breakdowns for combined invoices: If an IT provider does both labour and supplies, ask for itemisation so you can separate services from equipment.

Also consider keeping evidence that the data involved is business-related, especially for data recovery. You do not need to store sensitive client data in your tax file, but you can keep non-sensitive proof such as job folder names, project identifiers, or a generic description of what was recovered (for example, “client deliverables and accounting files”).

Subscriptions that bundle personal and business: practical strategies to keep things clean

Modern software companies love bundling: one plan covers multiple devices, users, and services. While it is convenient, it can complicate claiming. If you want to keep your business expenses clean, consider these strategies:

Use a dedicated business account: Separate logins and billing for business services make it obvious that the subscription is for business.

Separate billing methods: Pay business subscriptions from a business bank account or business card where possible.

Split family plans: If you currently use a family cloud plan, consider whether a separate business plan would make more sense. Even if it costs a bit more, it can reduce record-keeping friction and lower risk of an incorrect claim.

Keep usage reports: If you must share a plan, export or screenshot usage reports periodically to support apportionment.

Special situation: backups and data recovery tied to legal or regulatory record-keeping

Many businesses have record-keeping obligations: keeping invoices, receipts, payroll records, contracts, and customer communications for a prescribed period. If your backups are part of meeting those obligations, that strengthens the argument that the expense is business-related. For example, a business that must maintain client records securely or keep accounting records for multiple years may rely on backup retention policies as part of compliance.

If this applies to you, it may help to document your backup approach in a simple internal policy: what you back up, how often, where it is stored, and how long you retain it. This is useful operationally and can also help demonstrate the business purpose of the spending.

What about personal data mixed into business systems?

In the real world, boundaries blur. A folder on a work laptop might contain both personal and business documents. A phone used for client calls also stores family photos. A cloud account holds both. This doesn’t automatically disqualify a claim, but it increases the importance of reasonableness.

If you are claiming a cost connected to a mixed environment, ask yourself: is the expense genuinely incurred for the business, and is the business use substantial? If yes, apportion. If the business use is minor, it may be safer to avoid claiming, or to restructure your setup going forward to make separation easier. Some people also find it helpful to “clean up” their systems—moving personal data off business devices and into personal accounts—to reduce future complexity.

How to categorize these expenses in your bookkeeping

Good categorization helps you track spending, prepare accounts, and justify claims. While category names vary, here are common approaches:

Cloud backup subscriptions: Software subscriptions, IT services, or office expenses.

External drives and NAS devices: Computer equipment, IT hardware, or capital assets (depending on your accounting approach).

Backup software licences: Software, subscriptions, or intangible assets (for larger purchases).

Data recovery services: Repairs and maintenance, IT services, or professional fees.

Managed IT support contracts: IT services, professional services, or office overheads.

If you are unsure how your system treats equipment (expense vs asset), check the settings or ask your accountant. Even within the same business, the treatment can vary based on cost, expected lifespan, and local rules.

Practical checklist: can I claim this backup, recovery, or IT support cost?

Use this checklist to quickly assess whether a claim is likely appropriate:

1) What is the purpose? Is it to protect or restore business data, business devices, or business operations?

2) Is there personal use? If yes, can you reasonably apportion the cost?

3) Is it a subscription or a one-off purchase? Subscriptions are often operating expenses; one-off hardware may be capital.

4) Is it a repair or an improvement? Repairs restore; improvements upgrade. The difference can affect how you claim it.

5) Do you have documentation? Receipts, invoices, proof of payment, and a short note explaining the business purpose.

6) Is it consistent with how you operate? If your business depends on digital work, backups and support make obvious business sense.

How to make your future claims easier

Even if you can claim a cost today, you can make your life easier going forward by designing your IT setup with clear boundaries and good documentation.

Adopt a “business first” structure: Dedicated business devices and accounts reduce apportionment headaches.

Use itemised invoices: Ask providers to separate labour, parts, and software in their billing.

Test restores and keep logs: A simple note that you perform restore tests can reinforce that backup spending is a deliberate business practice, not a personal convenience.

Pay from business accounts: Keeping business payments separate simplifies record-keeping and makes the business purpose clearer.

Write a mini IT policy: Even a one-page document describing backups, retention, and security measures can be a useful business record.

Common misconceptions about claiming IT-related costs

Misconception 1: “If it’s on my laptop, it’s all business.” If the laptop is used personally too, you may need to apportion certain costs.

Misconception 2: “If it’s essential, it must be deductible immediately.” Something can be essential and still be treated as capital, meaning the claim may be spread over time depending on local rules.

Misconception 3: “I can claim the whole family plan because I sometimes use it for work.” Occasional business use does not justify claiming 100%. Apportionment is usually the correct approach.

Misconception 4: “Data recovery is personal because it feels emotional.” The emotional context doesn’t matter; the question is what data and devices the recovery relates to. Business recovery is often clearly business-related.

When it’s worth getting tailored advice

While many backup, recovery, and IT support costs are straightforward, there are situations where tailored advice is sensible: if you have large one-off purchases, if your device use is heavily mixed, if you operate through a company and you are unsure about how to treat home-based equipment, or if the spending is connected to a significant incident (like ransomware) with complex invoices and multiple providers.

A good accountant can help you apply the correct treatment for your jurisdiction, ensure you are claiming the right proportions, and align your bookkeeping categories with the way your financial statements and tax returns are prepared. If you do seek advice, bring your invoices, subscription statements, and a short explanation of how your systems are used for business. That makes the conversation faster and more accurate.

Bottom line: yes, often—if the business link is clear and you handle mixed use properly

Business-related backups, data recovery, and IT support are commonly claimable because they protect and restore the systems and records that keep your business running. Cloud backup subscriptions and routine IT support are often the easiest to justify as operating expenses. Hardware purchases and major upgrades may still be claimable but can involve capital treatment. Data recovery is frequently deductible when it relates to business data and business continuity, though you should separate service costs from equipment upgrades where possible.

The two keys to claiming confidently are (1) making the business purpose clear through how you structure and use your technology, and (2) keeping clean documentation—receipts, proof of payment, and simple notes about business use. Where personal use exists, apportion sensibly rather than forcing a full claim. With those habits, technology spending becomes just another normal part of running a modern business, rather than a grey area you dread at tax time.