Can I claim expenses for business-related market research?

Understanding what “business-related market research” means for expenses

Business-related market research is any structured effort you undertake to understand a market so you can make better commercial decisions. That could include figuring out what customers want, how competitors are priced, whether demand exists in a new location, what distribution channels are realistic, or how a product might need to be adapted. For expense-claim purposes, the key idea is not whether the research is interesting or helpful in a general sense, but whether it is undertaken for the purposes of the business. Expenses are typically more defensible when the link between the research and generating or protecting business income is clear.

Market research can be informal (for example, visiting shops, collecting brochures, doing competitor checks, observing consumer behavior) or formal (such as paying a research agency, running a survey, commissioning focus groups, buying industry reports, or paying for access to a market intelligence database). Both can potentially be allowable, but the more informal the activity, the more important it becomes to document the business purpose and keep the boundaries clean between business and personal elements.

When people ask “Can I claim expenses for business-related market research?” they are usually dealing with one of two scenarios: (1) they are already trading and want to claim research costs as part of operating and growing the business; or (2) they are preparing to start a business and want to know whether early research costs can be claimed. The answer depends heavily on where you are in the business lifecycle, what the research relates to, and whether the spending is revenue in nature (ongoing operating costs) or capital in nature (creating or acquiring a long-term asset or capability).

The core principle: the expense must be for the purposes of the business

The guiding test for most business deductions is whether the expense is incurred wholly and exclusively for the purposes of the trade or business. In practical terms, that means you should be able to explain how the spending supports business income, helps you win customers, helps you price or position your offering, reduces risk in a commercial decision, or supports compliance and strategic planning that the business needs.

Market research tends to sit comfortably within this principle when it directly informs a business decision. Examples include researching customer preferences before launching a new product line, checking competitor pricing to set your own pricing strategy, testing a marketing message to improve conversions, or buying an industry report to assess the size of a market segment you plan to serve. The harder cases arise when there is a dual purpose: perhaps you travel somewhere partly for research and partly for personal enjoyment, or you buy a subscription that you use for business research but also for personal interest.

If there is any significant personal element, you should expect that not all costs will be allowable. You may need to apportion, exclude parts that are personal, or in some cases accept that the entire cost becomes non-deductible because you cannot separate the private motive from the business motive. The cleaner you make it—separate trips, separate receipts, separate accounts, and a clear paper trail—the stronger your position.

Revenue vs capital: why the distinction matters

One of the most important distinctions in expense claims is between revenue expenditure and capital expenditure. Revenue expenditure is generally the day-to-day cost of running the business, and it is usually deductible against profits in the period it is incurred (subject to local rules). Capital expenditure is spending that creates, improves, or acquires an asset or enduring benefit—something that will support the business over a longer timeframe. Capital items may not be deductible in the same way or at the same time; instead, they may be dealt with through capital allowances, depreciation rules, or may form part of the cost of an asset.

Market research can fall on either side. Paying for monthly access to a research database used regularly to support ongoing marketing decisions often looks like revenue. Commissioning a substantial one-off market study that underpins the creation of a new business division, a major new brand, or entry into a new country might be argued to have an enduring benefit and could be seen as capital. In practice, the treatment will depend on the nature and scale of the research, how it is used, and the framework in your jurisdiction.

A helpful way to think about it is: is this research part of routine trading activity, or is it part of building something new and lasting? Routine trading activity tends to be revenue. Building something new, especially if it relates to the structure of the business or the acquisition of a long-term asset, can look capital. This is not always straightforward, so it is wise to keep detailed notes about the purpose of the research and how it ties to your current operations.

Pre-trading research: can you claim before you start trading?

Many people spend money on market research before they officially begin trading—perhaps they pay for industry reports, attend trade shows to validate demand, buy sample products, run test ads, or hire a consultant to assess viability. Whether you can claim those costs depends on the rules where you are and on whether the spending is considered incurred “in the course of” the trade or before it begins.

In many tax systems, certain pre-trading expenses can be treated as if they were incurred on the first day of trading, provided they would have been deductible if incurred after the start of trading and they occur within a specified look-back period. However, pre-trading costs that are capital in nature, or that relate to setting up the business structure (like incorporation costs, acquiring premises, or buying major equipment), may be treated differently.

From a practical perspective, if you are in the pre-trading phase and want the best chance of claiming market research costs later, you should (a) keep a clear file of the research and how it led to the decision to start trading, (b) store invoices and proof of payment, (c) use a dedicated business bank account where possible, and (d) record dates so you can demonstrate the timeline between the spending and the commencement of trade.

If the research ultimately leads you to decide not to proceed, the treatment can be more complex. Some systems allow certain abandoned project costs; others are less generous. Even if your research doesn’t lead to a successful launch, it can still have been business-motivated. What matters is whether the spending was part of a genuine attempt to carry on a trade rather than a hobby or general interest activity.

Common allowable market research costs

Market research can involve a wide range of spending. The following categories are commonly allowable when the business purpose is clear and the costs are reasonable.

Industry reports and data subscriptions

Buying an industry report, paying for access to a market intelligence platform, subscribing to a database of company financials, or purchasing sector-specific trend data can be a straightforward business expense when you use it to plan or run the business. Keep the invoice, describe in your records what decision it supported, and ensure the subscription is used primarily (ideally exclusively) for business purposes.

If the subscription is shared across personal and business use, you may need to apportion. For example, if you subscribe to a general news product but only certain premium features are used for business research, it can be tricky to justify the full cost. In those cases, a dedicated business subscription or a separate plan can simplify things.

Surveys, focus groups, and user testing

Costs associated with running surveys—survey platform fees, incentives for participants, or payments to a market research moderator—are generally easier to justify when the research is tied to specific business questions. For example: testing pricing sensitivity, evaluating a new product concept, assessing brand perceptions, or validating marketing messages.

Participant incentives deserve special care. Keep a record of who was paid (or anonymized IDs if you must protect privacy), the purpose of the incentive, and confirmation that it was connected to research rather than gifts for personal relationships. Incentives should be reasonable and consistent with what’s typical for the type of research you are conducting.

Professional services: consultants and agencies

Hiring a consultant to conduct competitor analysis, market sizing, customer interviews, or go-to-market planning can be deductible as a business expense when it relates to current trading or an identifiable business project. Ensure the engagement letter or contract describes the scope as market research or strategy support, and keep deliverables such as reports, slide decks, or notes.

Be mindful of where consulting blurs into capital activity. If the consultant’s work is essentially building a new business structure or acquiring a long-term asset (for example, negotiating an acquisition), it may not be treated as a straightforward revenue cost. Clear scoping and labeling can help, but it must reflect reality.

Competitor analysis and mystery shopping

Mystery shopping, buying competitor products to assess quality, paying for competitor price lists, or purchasing a competitor’s service to understand the customer journey can be allowable, provided it is done for business analysis rather than personal consumption. If you buy a competitor product and then use it personally, you may need to treat it as a non-deductible personal benefit or adjust for private use.

A good practice is to document what you learned, how it influenced your own offering, and to store evidence such as screenshots, photos, or notes. If you purchase multiple competitor products, keep a log explaining why each purchase was necessary for research rather than preference.

Test advertising and marketing experiments

Running small test campaigns—pay-per-click ads, social media ads, landing page tests, or email marketing experiments—to gauge demand or identify customer segments can be a strong example of market research, especially for digital-first businesses. The cost of the ads is often a marketing expense, but the purpose of the experiment can be documented as research.

Keep campaign reports, results summaries, and the hypothesis you were testing. Not only does this help with tax defensibility, it helps you run a better business.

Travel and field research: what you can claim and what to watch

Travel is one of the most common (and most scrutinized) areas when it comes to market research expenses. Visiting a location to assess foot traffic, evaluate competitor presence, meet potential distributors, attend a trade show, or conduct in-person interviews can be legitimate business activity. But travel also easily mixes with personal enjoyment, which is where problems arise.

Transportation

Flights, trains, taxis, ride-shares, mileage in your own vehicle, and local transport can be claimable if the trip is primarily for business-related research. Keep itineraries, meeting notes, event tickets, and a clear schedule showing what business activities occurred.

If the trip has mixed purposes, you may need to apportion. For example, if you take a seven-day trip with two days of business research and five days of holiday, claiming the full airfare will often be difficult to justify. The more the personal portion dominates, the more likely it is that the main cost will be treated as personal.

Accommodation and meals

Hotel costs may be claimable when you need to stay overnight for research and the trip is business-focused. Meals can be more complicated because entertainment and subsistence rules differ widely. In some places, meals while traveling for business can be partially allowable; in others, they may be restricted or treated differently. The safest approach is to treat meals conservatively, keep receipts, and ensure the meal is genuinely part of the travel required for business research rather than social dining.

When meals include clients, suppliers, or contacts you are interviewing, document the attendees and the purpose. If the meal is more like entertainment than research, you may find it is restricted even if it relates to business networking. A clear business agenda is important.

Trade shows, conferences, and exhibitions

Attending a trade show can be both marketing and research: you can learn about competitors, discover suppliers, and observe emerging trends. Costs can include entry tickets, travel, accommodation, and sometimes booth fees if you exhibit. Entry tickets and reasonable travel costs are usually easier to defend as research. Exhibiting can be a marketing activity, which may still be allowable, but it’s not strictly “research.”

If the conference includes a significant leisure component—such as resort-style venues, optional tours, or guest entertainment—keep your costs tightly aligned to the business elements and avoid claiming personal add-ons.

Education and training vs market research

Sometimes people label training as “market research” because the subject is relevant to their industry. But training has its own rules in many tax systems. Training that updates or maintains existing skills used in a current trade can be allowable; training that gives you a new trade or a new skill set that fundamentally changes what you do can be treated as capital or non-deductible.

If you attend a course on “How to start a business in X,” that may not be treated the same as buying a report on “Market demand in X.” Be honest about what the expense is. If the primary purpose is education, call it education and apply the correct treatment. If it’s genuinely research—like attending a sector briefing to gather data for a pricing decision—then document it as such.

Home office and digital research costs

Much market research is conducted from a laptop at home. Costs might include internet, phone, software, and devices. Whether you can claim these depends on the extent to which they are used for business and whether they are capital or revenue items.

Software subscriptions used for research—analytics platforms, keyword tools, data visualization software, survey platforms—are typically revenue expenses when paid monthly or annually. Hardware such as computers or tablets may be capital items, and the rules may require you to claim them through capital allowances rather than as an immediate expense. If a device is used partly personally, apportionment may be needed.

For home internet and phone, it is often hard to argue that the entire bill is business-only. Many business owners claim a reasonable business proportion. A simple way to support this is to maintain an estimate based on usage (for example, number of hours used for business research relative to total use) and apply it consistently.

What usually isn’t allowable (or is risky) even if it feels “research-y”

Some costs feel connected to market research but are commonly disallowed or challenged due to personal benefit, insufficient business connection, or because they are considered capital or private in nature.

General interest spending

If you buy books, magazines, streaming subscriptions, or general media because you “might get ideas,” it can be difficult to prove a direct business purpose unless the content is highly specific to your trade and you can show it is used as part of your research process. The more general the content, the more it looks like personal consumption.

Travel that is primarily a holiday

Travel can be claimed when the trip is primarily for business, but when business is a thin layer over a personal trip, it becomes risky. A common trap is adding a few shop visits or taking some photos and calling it market research. That may not be enough to justify major costs like flights and a resort hotel.

If you genuinely need to visit a location for research, consider making the trip tightly focused on business activities: schedule meetings, attend relevant events, document your research plan, and minimize leisure add-ons. If you do add leisure days, separate the costs and don’t claim the personal portion.

Clothing and personal appearance

Even if you buy specific clothing to “fit in” while doing field research or attending trade events, clothing is usually seen as personal. Unless the clothing is genuinely protective or a uniform with clear business identification, it is generally difficult to claim.

Costs that relate to setting up or acquiring the business structure

Expenses related to forming a company, acquiring a business, negotiating the purchase of a major asset, or establishing premises are often treated as capital or otherwise not treated as ordinary operating expenses. Market research that is directly tied to such activities might also be treated differently. For example, due diligence costs for acquiring another company are not the same as ongoing competitor analysis.

Mixed-use items without a reasonable apportionment

It’s common to use a phone, internet, or software tool for both business research and personal interest. The risk arises when you claim 100% without evidence. A reasonable apportionment, applied consistently, is often safer than an all-or-nothing approach. If you cannot reasonably apportion, it may be better to avoid claiming that cost or to move to a dedicated business subscription or device.

How to document market research expenses so they are defensible

Documentation is the difference between a claim that is easy to support and one that collapses under scrutiny. You don’t need a novel, but you do need enough to show that the expense was incurred for business reasons and that the amount claimed is accurate.

Keep the basics: invoices, receipts, proof of payment

Keep itemized receipts and invoices wherever possible. For digital products, save the invoice PDF and an email confirmation. For subscriptions, store proof of ongoing payments. If you pay in cash, keep the receipt and record the business purpose immediately while it’s fresh.

Record the business purpose

For each research cost, write a brief note answering: “What decision did this support?” For example: “Purchased competitor pricing report to set Q1 pricing for new service tier,” or “Ran survey to test demand for eco-friendly packaging among target segment.” This kind of note can be stored in your accounting software, on the receipt, or in a simple spreadsheet.

Create a research file

Maintain a folder (digital is fine) for each major research project. Include the question you were trying to answer, the methodology, key findings, and how you used the results. This not only supports deductibility, it also makes the research more valuable for the business.

Separate personal and business spending

Use a dedicated business card or bank account for research expenses where possible. If you must use a personal card, immediately reimburse yourself from the business with a clear reference or record it as an owner expense with attached documentation. Mixing spending is one of the fastest ways to lose track and one of the easiest red flags for an auditor or reviewer.

Apportion mixed costs transparently

If an expense has both business and personal elements, decide on a reasonable apportionment method and stick to it. Examples include time-based apportionment (hours used for business vs total), usage-based apportionment (data used for business), or activity-based apportionment (business days vs total days on a trip). Keep a brief note about how you calculated the split.

Examples: applying the principles to real-world scenarios

Seeing the principles in action can help you judge your own situation. Here are some common examples and how they usually play out.

Example 1: Buying an expensive market report before launching

You buy an industry report to confirm the market size and customer segments for a business you plan to launch. If your tax system allows certain pre-trading expenses, you may be able to claim it once you start trading, provided the cost is the type that would have been deductible if incurred after trading began. Keep the report, the invoice, and a note describing how it informed your launch decision.

Example 2: Running a small ad test to validate demand

You spend money on online ads that direct people to a landing page to see if they sign up for a waiting list. This is a strong market research activity: it tests real demand. The ad spend is typically claimable as a business expense if you are trading, or potentially claimable later if it qualifies as a pre-trading cost under your rules. Keep campaign screenshots, reports, and the landing page analytics.

Example 3: Visiting a city to research opening a second location

You travel to a new city to assess the viability of opening a second location. You visit competitors, talk to potential partners, assess foot traffic at different times, and meet a commercial property agent. If the trip is primarily business and you document it, travel costs may be claimable. If you also extend the trip for a weekend holiday, separate those costs and only claim the business portion.

Example 4: Buying competitor products and consuming them personally

You buy a competitor product to compare packaging and customer experience. If you then consume it personally with no remaining evidence or analysis, it can look like personal consumption. To strengthen the claim, keep the product for analysis where possible, photograph the packaging, record observations, and demonstrate how the purchase was part of a research process. If personal use dominates, consider not claiming it or only claiming a portion that can be justified.

Example 5: Subscribing to a general media service “for trends”

You subscribe to a general media platform because you “keep up with trends.” This is often hard to defend as wholly for business unless your business is directly related to media analysis and the subscription is a core tool. A more defensible approach is to subscribe to industry-specific research sources and keep a log of how you use them.

Special considerations for different business types

Market research claims can look different depending on how your business operates. The underlying principles remain the same, but the evidence and typical expense categories vary.

Online businesses and e-commerce

Digital businesses often rely on analytics tools, keyword research, conversion tracking, competitor pricing software, and paid tests. These can be straightforward business expenses when they are tied to real decision-making and the business is active. Keep dashboards, reports, and decision notes. For e-commerce, sampling competitor packaging and shipping methods can be legitimate research, but avoid claiming personal items disguised as samples.

Consultants and professional services

Consultants may spend money on research subscriptions, attending sector briefings, or purchasing datasets. Because your “product” is often advice, research can be central to delivering value. Still, the wholly-and-exclusively principle applies: general-interest reading may not qualify. A clear connection to client work or service development helps.

Restaurants, retail, and hospitality

In these industries, “research” can look like visiting competitors, tasting menus, assessing service standards, or evaluating locations. This is a sensitive area because it overlaps heavily with personal enjoyment. To support deductibility, keep detailed notes, focus on business hours and business comparisons, and avoid claiming expenses that look like leisure. Where possible, make research visits purposeful and document them as such.

Creative industries

Creatives often research trends, styles, and consumer preferences. Some research costs may be allowable when they directly support your commercial output. But creative inspiration can be a gray area, especially if it involves entertainment, travel, or experiences that could be personal. Your best defense is clear project documentation: what you researched, how it influenced the deliverable, and how it supported revenue.

Reasonableness and proportionality: don’t forget the “common sense” test

Even if an expense has a business purpose, the amount still needs to be reasonable in the context of your business. Paying for a high-cost global market study when your business is a small local operation may attract scrutiny unless you can clearly show why it was necessary. Conversely, a modest subscription to an industry database for a business that regularly uses data to price and sell is usually easier to justify.

Reasonableness is not only about the number; it’s about the story. If the expense aligns with your business model, your stage of growth, and your decision-making process, it is more credible. If it looks like a personal luxury dressed up as research, it is more vulnerable.

VAT, sales tax, and input tax considerations

If your business is registered for VAT or a similar consumption tax system, market research expenses may also involve input tax recovery. The same themes appear: the purchase must relate to taxable business activity, and private use may restrict recovery. International purchases can introduce extra complexity, such as reverse charge rules for digital services or different documentation requirements for foreign invoices.

Because consumption tax rules vary widely and can change over time, it’s prudent to treat this as a separate analysis from income tax deductibility. Keep VAT invoices where required, ensure supplier details are correct, and record the business use case. If you are unsure, a bookkeeper or tax adviser can help you avoid mistakes that become costly later.

Practical checklist before you claim market research expenses

Before you include market research costs in your expense claims, run through a quick checklist to reduce risk and improve accuracy.

First, confirm the purpose: can you clearly explain how the spending supported the business? Second, confirm timing: were you trading at the time, and if not, do your rules allow pre-trading expense treatment? Third, confirm the nature: does it look like revenue expenditure or capital expenditure? Fourth, check for private benefit: is there any personal use, and if so, have you excluded or apportioned it? Fifth, confirm documentation: do you have invoices, proof of payment, and notes or outputs showing the research activity?

If you can answer those questions confidently, you are usually in a much stronger position to claim the expenses, and you also gain clarity on what the research actually accomplished for your business.

When to get professional advice

Many market research expenses are straightforward, but certain scenarios justify professional advice. These include: large one-off research projects that might be capital; international travel with mixed purposes; research conducted before trading begins; research that relates to launching a new line of business distinct from your existing trade; and cases where entertainment, hospitality, or personal benefits are intertwined.

A professional can help you classify the expense correctly, decide whether apportionment is appropriate, and ensure you comply with recordkeeping requirements. Even a short consultation can prevent a costly mistake, especially if you are making a significant investment in research.

Bottom line: yes, often—but the details decide

In many cases, you can claim expenses for business-related market research, especially when the spending is directly linked to commercial decision-making and is properly documented. Subscriptions, reports, surveys, user testing, consultant fees, and targeted travel can all be allowable in the right circumstances. The main pitfalls are private or mixed-purpose spending, weak documentation, and misclassifying costs that are capital in nature.

If you treat market research like a formal business activity—set a clear question, gather evidence, record findings, and keep your receipts—you not only strengthen your tax position, you also get more value from the research itself. The best expense claims are the ones that reflect genuine, disciplined business work.