Can I claim expenses for business-related bookkeeping help?

Can I claim expenses for business-related bookkeeping help?

If you’re paying someone to help keep your business finances tidy—whether that’s a freelance bookkeeper, an accountant, or a subscription to cloud bookkeeping software—you’re probably wondering the same thing: can you claim it as a business expense? In most situations, yes: bookkeeping support is a common, ordinary cost of running a business, and the cost is often deductible against business income (subject to the rules in your country and the specifics of your business).

That said, “bookkeeping help” can cover a wide range of services, and the tax treatment depends on what you paid for, who received the benefit, and whether any part of the cost relates to personal (non-business) matters. This article breaks down how these expenses typically work, what kinds of bookkeeping help are usually allowable, how to handle mixed personal/business work, what records you should keep, and the common mistakes that cause headaches later.

What it means to “claim” bookkeeping expenses

When people say they want to “claim” an expense, they usually mean one of two things:

1) Deducting the cost to reduce taxable profit. Most tax systems calculate business tax by taking business income and subtracting allowable business expenses. If a bookkeeping expense is allowable, it reduces your taxable profit (and therefore often reduces the amount of tax you pay).

2) Reclaiming sales tax/VAT (if applicable). If you’re registered for a consumption tax like VAT/GST and the supplier charged it, you may be able to reclaim the VAT/GST portion, provided the purchase is for business use and you meet the documentation requirements.

These two ideas are related but not identical. An expense can be deductible for income tax purposes yet have different rules for VAT/GST recovery, especially if there’s any personal element or the supplier’s invoice is not compliant.

Why bookkeeping help is usually a normal business expense

Bookkeeping sits right at the centre of running a business: tracking sales, managing bills, paying staff, submitting returns, chasing late payers, budgeting, and staying compliant with your filing obligations. Because it’s closely tied to earning income and keeping your business operating properly, tax authorities typically treat bookkeeping support as an ordinary and necessary business expense.

Examples of costs that commonly fall under “bookkeeping help” include:

• Paying a bookkeeper to record transactions, reconcile bank accounts, or produce reports

• Paying an accountant to review your books, adjust entries, or prepare year-end accounts

• Fees for payroll processing and routine payroll reporting

• Subscriptions to bookkeeping and accounting software

• Payment processing and invoicing add-ons (where primarily used to support bookkeeping workflows)

In other words, if the help is genuinely for business recordkeeping and reporting, it’s often claimable.

Common types of bookkeeping help you can often claim

Bookkeeping services can be delivered in many formats, from a person you hire for a few hours a month to a fully outsourced finance function. Here are the typical categories that are often allowable as expenses.

1) Freelance or contracted bookkeeping services

If you pay a self-employed bookkeeper or a bookkeeping firm, the fees are usually claimable as long as the work is performed for business purposes. This might include:

• Recording and categorising transactions

• Reconciling bank and credit card accounts

• Preparing monthly management reports

• Maintaining ledgers for sales and purchases

• Setting up or cleaning up bookkeeping records

For many small businesses, this is the most straightforward scenario: you have an invoice for bookkeeping services, the service relates to the business, and you keep the invoice and evidence of payment.

2) Accountancy fees connected to routine bookkeeping and compliance

Some businesses use “bookkeeper” and “accountant” interchangeably, but many accountants provide higher-level services that still include bookkeeping-related tasks. Fees for work such as preparing accounts, reviewing bookkeeping records, and completing compliance filings are often allowable. Examples include:

• Annual accounts preparation

• Business tax return preparation

• Bookkeeping review and adjustments

• VAT/GST return preparation (where relevant)

• Payroll year-end reporting and filings

Generally, costs that relate to meeting your business tax obligations and maintaining accurate business records are commonly treated as allowable business expenses.

3) Payroll processing support

Payroll can be part of bookkeeping or a separate service. If you pay for payroll support—software, a payroll bureau, or professional fees—these costs are typically claimable because they are directly related to employing staff and meeting payroll reporting obligations.

Common payroll-related claimable costs can include:

• Payroll software subscriptions

• Payroll bureau fees

• Payroll processing charges per payslip

• Employer compliance reporting services

Be careful, though: penalties for late filings or payroll non-compliance are often treated differently and may not be deductible in some jurisdictions.

4) Bookkeeping software, apps, and digital tools

Cloud accounting software is a classic business expense. Subscriptions to tools used for bookkeeping and recordkeeping are generally claimable in whole or in part, depending on business use. This includes:

• Accounting platforms and bookkeeping apps

• Receipt capture tools and scanning apps

• Invoicing systems integrated with your accounts

• Time tracking tools used for billing that feed into bookkeeping records

If the software is used partly for personal finances, you may need to apportion the cost so you only claim the business portion.

5) Training and support related to bookkeeping systems

Sometimes “bookkeeping help” isn’t the bookkeeping itself but training on how to do it properly. Whether you can claim training costs depends on local rules and the nature of the training. In many systems, training that maintains or improves existing skills used in the business may be allowable, while training that gives you brand-new skills or qualifies you for a new line of work might not be.

For example, a short course on using your existing bookkeeping software or improving your recordkeeping processes may be more likely to be treated as a business expense than training that effectively prepares you to become a professional bookkeeper as a new career path. The closer the training is to your existing business activity and maintaining current business capability, the stronger the claim tends to be.

Expenses you might not be able to claim (or that require special care)

Not every bookkeeping-related cost is automatically deductible. The biggest issues usually come down to personal use, capital costs, penalties, and services that are not genuinely “for the trade.”

1) Personal tax return preparation (not business-related)

If an accountant prepares your personal tax return that includes non-business income (for example, investment income, rental income, or employment income unrelated to the business), the portion of fees relating to personal matters is often not allowable as a business expense.

However, if the personal return includes the business figures and the accountant’s work overlaps with finalising business accounts, it’s common to split the fee. You might claim the portion that relates to preparing business accounts and business tax calculations, while leaving the personal portion unclaimed.

The key is having a reasonable basis for the split and documentation that supports it (for example, an invoice broken down by service line or a written breakdown from the accountant).

2) Costs connected to setting up a business structure

Sometimes bookkeeping help includes advice on setting up a new company, partnership, trust, or a major restructuring. Certain formation and restructuring costs can be treated as capital in nature rather than routine running costs. Capital costs aren’t always immediately deductible; they may be treated differently (for example, spread over time or treated as part of the cost base for other purposes) depending on your jurisdiction.

If you’re paying for professional advice that’s clearly about creating the business entity or changing its fundamental structure rather than maintaining day-to-day records, you may need to treat those fees differently from normal bookkeeping costs.

3) Fines and penalties related to bookkeeping or tax filings

A crucial distinction: the fee you pay a professional to help you comply is usually different from a fine you pay because you didn’t comply. In many countries, fines and penalties imposed by tax authorities are not deductible. Interest may be treated differently depending on the rules where you are, but penalties are often specifically disallowed.

So, paying an accountant to fix your records and submit late filings may be deductible, while the penalty for filing late may not be.

4) “Dual purpose” services where personal benefit is significant

If the bookkeeping help also provides a large personal benefit, you may need to apportion or disallow part of the expense. Examples include:

• A bookkeeper who also manages your personal household budget

• An accountant who prepares both business accounts and personal investment planning under one fee

• A subscription tool that you use for personal budgeting and business bookkeeping

In these cases, you generally claim only the business proportion, based on a fair and reasonable method.

How to handle mixed business and personal bookkeeping help

Mixed-use costs are common, especially for sole traders and small business owners where personal and business finances can blur. The best approach is to keep things separate from the beginning, but if they’re already mixed, you can still handle it in a structured way.

Step 1: Identify the services that are purely business

Look at the invoice, engagement letter, or scope of work and highlight tasks that clearly support the business, such as reconciliations, VAT/GST filings, payroll, business accounts, and business tax computations.

Step 2: Identify services that are purely personal

Examples include personal tax advice unrelated to the business, household budgeting, personal investment reviews, or family trust matters that don’t relate to the business trade.

Step 3: Apportion fairly if there’s genuine overlap

If a fee covers both, split it on a reasonable basis. Common bases include:

• Time spent: a breakdown of hours on business vs personal work

• Itemised invoicing: separate line items for business and personal tasks

• Separate quotes: one fee for business accounts, one for personal return

Keep a note explaining how you calculated the split and keep any supporting emails or documents. If you ever have to justify the claim, “I estimated” is less persuasive than “My accountant’s invoice shows X for business accounts and Y for personal filing.”

Claiming bookkeeping expenses when you’re a sole trader vs a limited company

The basic principle—claim expenses incurred wholly for business purposes—tends to apply widely. But the practical mechanics can differ depending on your business structure.

Sole traders and self-employed individuals

As a sole trader, you and the business are legally the same person in many jurisdictions, so the boundaries between “business expense” and “personal expense” can be blurry. That’s why apportionment matters so much. It’s common for the same accountant to handle both your business accounts and your personal return.

To strengthen your claim:

• Maintain a separate business bank account, even if not legally required

• Pay bookkeeping and accountancy fees from the business account

• Ask for itemised invoices that separate business work from personal work

Limited companies and incorporated businesses

If you operate through a company, the company is a separate legal entity. That often makes it clearer what the company can claim (expenses incurred for the company’s trade) and what is personal to you as a director or shareholder.

In many cases, the company can claim accountancy fees for:

• Company bookkeeping and accounts preparation

• Corporation/business tax filings

• Payroll and employer compliance

• VAT/GST filings (where applicable)

If the accountant also prepares your personal tax return, the company paying for that personal service can create complications. Depending on the rules where you are, it may be treated as a personal benefit provided by the company (sometimes triggering reporting or additional tax). A cleaner approach is often for the company to pay the company-related fees and for you personally to pay any personal-only fees.

Partnerships

In a partnership, bookkeeping costs are typically partnership expenses if they relate to the partnership trade. Again, personal returns for partners may be separate and need different treatment. The best practice is to have the partnership pay for partnership bookkeeping and accounts, and partners pay for personal filings unless the arrangement and tax rules clearly support a different approach.

Day-to-day bookkeeping help vs “one-off cleanup” projects

Many businesses don’t keep perfect records all year and then pay someone to “fix it” at year-end. The question is whether that cleanup is still a revenue expense (a normal cost of running the business) or something different.

In many cases, paying a bookkeeper to tidy up your accounts, reconcile months of transactions, and bring records up to date is still considered part of normal business administration and is generally claimable.

However, if the work is part of creating something enduring—like implementing a major new finance system, designing a new chart of accounts as part of a broader restructure, or setting up a company for the first time—some of those costs may be considered capital or treated differently. In practice, many small-business bookkeeping cleanups are treated as ordinary admin costs, but it’s worth distinguishing between “catch-up bookkeeping” and “business formation or structural change.”

Can you claim bookkeeping help if you work from home or have a side hustle?

Yes, potentially. The key is that the expense is incurred for the business activity. Whether your business is full-time or part-time doesn’t automatically change the principle.

Two common scenarios deserve extra attention:

1) A side hustle with a mix of personal and business finances

If you’re running a small side business and your finances are heavily mixed, you may end up paying a bookkeeper to separate business from personal transactions. That service can still be for business purposes—because it’s needed to calculate business income and expenses accurately—but the more mixed the accounts are, the more careful you should be about apportioning any personal element.

2) Home office admin support

Sometimes bookkeeping help is bundled with broader admin support (email management, scheduling, invoicing, customer service). If you pay a virtual assistant or admin contractor who handles bookkeeping tasks as part of their duties, you can typically claim the business-related portion of their services. If their work is entirely for the business, the full cost may be claimable. If they also do personal admin, you’ll need to split it.

What records you should keep to support your claim

Even if an expense is allowable, weak recordkeeping can cause problems. Good documentation helps you claim confidently and makes life easier if you ever need to explain the expense.

Typically, you should keep:

• Invoices and receipts. These should show the supplier’s name, date, amount, and description of services. If sales tax/VAT applies, the invoice should usually show it correctly.

• Proof of payment. Bank statements, card statements, or payment confirmations help demonstrate that you actually paid the cost.

• Engagement letters or contracts. These describe the scope of work and can help prove the services are business-related.

• Itemisation or breakdowns. If fees cover business and personal work, ask for a split or keep an email that explains the allocation.

• Notes about the business purpose. A short note such as “monthly bookkeeping and VAT preparation” can be enough, especially if the invoice description is vague.

As a practical tip: if you receive an invoice that just says “professional services,” ask the supplier to clarify. Vague invoices aren’t automatically disallowed, but clearer descriptions reduce uncertainty.

How to categorise bookkeeping expenses in your accounts

To keep things tidy (and make tax time smoother), bookkeeping help is often categorised under one of these headings:

• Bookkeeping fees

• Accountancy fees

• Professional fees

• Payroll costs (for payroll processing services, not employee wages)

• Software subscriptions

Separating these categories can help you understand your overheads and provide clearer reporting. It also makes it easier to spot unusual spikes—for example, a one-off cleanup project that costs significantly more than your normal monthly bookkeeping.

VAT/GST considerations if you’re registered

If you’re registered for VAT/GST (or similar), you may be able to recover the tax charged on bookkeeping services and software subscriptions. This typically depends on:

• Whether the supplier charged VAT/GST correctly

• Whether you have a compliant tax invoice

• Whether the expense is for business purposes (and how much is business vs personal)

If a service is partly personal, you usually recover VAT/GST only on the business portion, if recovery is allowed at all for that kind of expense in your jurisdiction. Recordkeeping becomes even more important here: you need the invoice details and a rationale for any split.

Bookkeeping help paid in cash or informally

Some small businesses pay a friend, family member, or local helper for bookkeeping assistance. The tax rules generally focus on whether the expense is real, business-related, and properly documented, not whether the person is “professional.” However, informal arrangements can lead to problems if documentation is weak.

To keep things clean:

• Get a written invoice or receipt that describes the work

• Pay via traceable methods where possible (bank transfer is ideal)

• Make sure the rate is reasonable for the work performed

• Keep a record of what the person did and when

Also be aware that paying someone for work may create obligations for them (and sometimes for you) depending on employment status and local reporting rules. If you’re unsure whether someone is an employee, a contractor, or something else, it’s wise to check the rules and document the arrangement.

What about hiring an in-house bookkeeper?

If you employ a bookkeeper as staff, the costs of employing them—wages, employer taxes, benefits, and payroll costs—are typically business expenses. The bookkeeping “help” in this case is part of your staffing costs, and you would record it as payroll or wages rather than professional fees.

Be mindful that employment involves broader responsibilities: payroll reporting, employment contracts, workplace rules, and so on. But from a tax perspective, paying an employee to do bookkeeping is usually a standard business cost, provided the role genuinely supports the business.

How bookkeeping expenses interact with other claims

Bookkeeping support often touches other areas of your accounts, and it’s useful to understand how they connect.

Software and equipment

If your bookkeeping help involves purchasing equipment—such as a scanner or a laptop primarily used for accounting tasks—the equipment may be treated differently from software subscriptions. In many jurisdictions, physical equipment can be considered a capital asset, potentially claimed through depreciation or capital allowances rather than as an immediate expense. Whether you can deduct it immediately, and how, depends on local rules and thresholds.

Bank fees and payment processing

Some bookkeeping platforms bundle payment processing, bank feeds, or invoicing with bookkeeping. If the majority of the service is business-related, it’s usually acceptable to claim it as a business cost. For clarity, you might break out bank charges and merchant fees separately if your bookkeeping reports provide those splits.

Professional advice beyond bookkeeping

Sometimes a provider offers both bookkeeping and advisory services—business strategy, financing advice, or tax planning. Advisory fees can still be deductible if they relate to running the existing business, but they may attract closer scrutiny if they relate to buying or selling assets, restructuring ownership, or creating a new business line. Clear descriptions and separable billing help a lot here.

Common mistakes to avoid

Here are the pitfalls that most often cause problems when claiming bookkeeping help.

1) Claiming personal work as business expenses

This is the biggest one. If your accountant prepared your personal return, handled personal investments, or helped with a mortgage application, those costs may not be business expenses. If the invoice includes both business and personal work, split it.

2) No invoice, vague invoice, or missing proof of payment

Without documentation, you’re relying on memory and goodwill. Keep invoices and proof of payment. If the invoice description is vague, ask for a better one.

3) Paying from a personal account without clear records

It’s not always disallowed to pay business costs from a personal account (especially for sole traders), but it makes the audit trail harder. Where possible, use a dedicated business account and store documentation in one place.

4) Mixing bookkeeping with “setup” fees without understanding the difference

Day-to-day bookkeeping is usually straightforward. Formation and restructuring can be different. If your bill includes both, ask the provider to itemise it so you can treat each part correctly.

5) Claiming penalties as if they were professional fees

Paying a professional to fix a late filing can be deductible; paying the penalty for filing late often isn’t. Keep these clearly separated in your records.

Practical examples (and how to treat them)

Examples make the rules feel more concrete. Here are common scenarios and the typical approach.

Example 1: Monthly bookkeeper retainer

You pay a freelance bookkeeper a monthly fee to reconcile your bank accounts, categorise expenses, and produce a monthly profit and loss report. This is usually a straightforward business expense. Keep the invoice and proof of payment.

Example 2: Accountant prepares annual accounts and your personal return

Your accountant charges one fee that covers preparing the business accounts and completing your personal tax return. Typically, you would claim the business portion and not claim the personal portion. Ask for an itemised invoice or a breakdown to support the split.

Example 3: Catch-up bookkeeping to fix six months of messy records

You pay a bookkeeper to bring your books up to date because you fell behind. This is usually still a business expense because it relates to maintaining accurate business records and producing correct filings.

Example 4: Bookkeeping software used partly for personal budgeting

You use the same subscription tool to track business income and also to manage personal spending. You should typically claim only the business proportion. Better yet, use separate tools or separate “entities” within the software if it supports it.

Example 5: Company pays for director’s personal tax return

The company pays an accountant who prepares the company accounts and also the director’s personal tax return. The company can usually claim the company-related portion. The personal return portion may be treated as a personal benefit to the director in some systems and may require special handling. A cleaner approach is often to have the director pay personally for the personal portion.

How to make your bookkeeping costs more clearly claimable

If you want to avoid ambiguity and reduce stress at tax time, a few simple habits can make bookkeeping expenses much easier to justify.

1) Separate business and personal finances

Use a business bank account and, if practical, a business credit card. The more separate your finances are, the less time you pay for sorting and the easier it is to show that costs are business-related.

2) Ask for itemised invoices

If your accountant does multiple things for you, ask them to list the services separately. This makes it easier to claim the business parts correctly.

3) Keep a tidy digital folder

Store invoices and receipts in one place—cloud storage or within your bookkeeping platform—so you can retrieve them quickly.

4) Keep short notes about unusual expenses

If you pay for a one-off cleanup or a system migration, note why it was done and what it achieved. A short explanation can help months later.

5) Don’t treat “help” as automatically deductible

When in doubt, look at the purpose of the expense. If it’s to support the business, it’s more likely to be allowable. If it’s primarily personal, it’s less likely. If it’s mixed, split it.

FAQ-style questions business owners often ask

Is bookkeeping help deductible even if my business made a loss?

Often, yes. An allowable expense usually remains allowable whether your business is profitable or not. The loss and how it can be used depends on local rules, but the nature of the expense doesn’t change simply because you had a bad year.

Can I claim bookkeeping expenses for a new business that hasn’t started trading yet?

Some systems allow certain pre-trading costs if they relate to setting up the business and would have been deductible once trading begins, often within specified time limits and conditions. Other formation-related costs may be treated differently. Because this area varies a lot by jurisdiction, it’s smart to keep invoices clearly described and separated so you can classify them appropriately.

Can I claim the cost of fixing mistakes from previous years?

Paying a professional to correct records can often be a business expense. However, the tax treatment of any resulting adjustments or amended returns can be more complex. Keep clear documentation of what was done, why it was necessary, and what period it relates to.

What if my bookkeeper also does admin work?

If the admin work is for the business (invoicing, chasing debts, processing bills), it’s usually still a business cost. If the same person also does personal admin, split the cost on a fair basis and keep notes.

Do I need a “professional” to claim the expense?

Typically, no. The key is whether the expense is genuine, business-related, and properly documented. But you should be mindful of legal and practical issues: the person should be competent, the work should be real, and the arrangement should comply with any local employment or contractor rules.

Putting it all together

In most cases, you can claim expenses for business-related bookkeeping help because it’s a normal cost of running a business and maintaining compliant, accurate records. The tricky parts are usually not about whether bookkeeping is “allowed” but about the details: separating business from personal services, handling one-off projects that may have a capital or structural element, and maintaining clear documentation.

If you want the simplest path, aim for three things: keep business finances separate, get clear invoices that describe the work, and claim only the portion that truly relates to the business. When bookkeeping support is clearly connected to earning business income and meeting business obligations, it’s typically one of the more defensible and straightforward expenses you can put through your accounts.