Can I claim expenses for business-related social media advertising?

Understanding what “claiming expenses” actually means

Business owners and self-employed people often ask a simple question with a not-so-simple answer: “Can I claim expenses for business-related social media advertising?” In most cases, yes—if the advertising cost is incurred wholly and exclusively for the purposes of your business. That phrase matters because it sits at the heart of what makes an expense allowable. Social media advertising can be a legitimate commercial cost, but the details—why you spent the money, what you were promoting, how you account for it, and whether any personal benefit is mixed in—will determine how confidently you can treat it as a business expense.

When people say “claim,” they usually mean one of two things: deducting the cost from business profits before tax (for income tax or corporation tax), or reclaiming VAT (where applicable and where you’re VAT-registered). These are related but different. A cost can sometimes be deductible for profit calculations but not eligible for VAT recovery, and vice versa depending on how the expense is structured and documented. Understanding the difference helps you make cleaner records and avoid confusion later.

At a practical level, claiming social media advertising expenses is about showing a clear business rationale, keeping evidence of the spend, and recording it correctly in your bookkeeping system. If you do those three things well, you’ll typically be on solid ground.

What counts as “business-related social media advertising”?

Social media advertising is broader than a single boosted post. It can include paid placements, sponsored posts, video ads, lead generation forms, conversion campaigns, app install campaigns, retargeting ads, and promotions run through platforms like Meta (Facebook and Instagram), TikTok, LinkedIn, X, Pinterest, Snapchat, or YouTube. It may also include ad spend delivered through third-party tools—media-buying agencies, programmatic platforms, or marketing dashboards that distribute spend across multiple networks.

In general, an expense is business-related if it is intended to generate business income, protect or maintain your market position, or promote your goods and services to customers. Advertising is a classic example. If you are paying to reach potential customers, drive traffic to your website, generate enquiries, or grow sales, that is typically a business purpose.

However, a platform can be used for both business and personal activity. That’s where trouble can creep in. If an ad account is used to promote a personal page with no commercial activity, or if the advertising is for something not connected to the business, it may not be allowable. If the advertising partly supports a business and partly serves a personal purpose, you may need to apportion the expense and claim only the business element.

The “wholly and exclusively” principle in plain language

The key test for many business expense regimes is whether the cost is incurred wholly and exclusively for the purposes of trade or business. In plain language, that means: did you spend the money to help your business, and only your business? Advertising often meets that test because the objective is commercial—reach customers, increase revenue, build demand.

But “wholly and exclusively” isn’t just about intention; it also looks at the nature of the spend. For example, paying for ads to promote a product line is generally business. Paying for ads to promote a personal milestone, a hobby page, or a non-commercial cause is generally not. Paying for ads that simultaneously promote a business and boost your personal profile can be more nuanced. Some personal benefit can be incidental and still allowable, but if the personal benefit is a significant driver of the spend, the expense becomes harder to justify as fully business-related.

If you’re unsure, ask yourself: if I didn’t run a business, would I still spend this money? If the answer is “yes,” that can be a red flag. If the answer is “no—this is purely for customers and sales,” it’s more likely to be a valid business expense.

Common scenarios where social media ad spend is usually claimable

Many real-world situations are straightforward. Here are examples where advertising costs are typically viewed as legitimate business expenses, provided you can show a clear link to your business activity.

First, campaigns promoting your products or services. If you run ads for an e-commerce store, a local service business, an online course, a subscription, or a new product launch, the ad spend is generally a standard marketing cost.

Second, lead generation and enquiries. If you pay for lead forms, click-to-call ads, direct message campaigns, or website conversion campaigns that generate quotes and enquiries, the business purpose is clear.

Third, brand awareness campaigns. Not every ad results in an immediate sale. Brand-building campaigns can still be business-related if they support future revenue. The key is that the brand being promoted is the business brand, not a personal identity unconnected to commercial activity.

Fourth, recruitment advertising. Ads used to hire staff or contractors can be business expenses if they are genuinely recruitment-related. Social platforms can be used to target potential hires, and the cost is generally part of staffing and recruitment overheads.

Fifth, event promotion. If you run a paid event, workshop, webinar, pop-up shop, or trade stand, ads promoting that event are typically part of business marketing. Even if the event is free, it can still be business-related if it’s intended to generate leads, sales, or customer relationships.

When social media advertising might not be fully claimable

Not all advertising costs automatically qualify. Certain patterns commonly create problems, usually because the spend is partly personal or because the underlying activity is not clearly commercial.

One example is promoting content that is primarily personal. If you boost posts about your personal life, hobbies, or general lifestyle content that isn’t linked to your business, those costs may not be allowable. Even if your personal brand is “part of” how you market yourself, you’ll want to show how it ties to revenue-generating activity—especially if you’re a consultant, creator, or freelancer.

Another example is promoting a page or account that doesn’t clearly represent a trading business. If the account is largely for personal use and only occasionally mentions the business, it becomes harder to argue that ad spend was for business purposes.

A third example is where the advertising relates to something you cannot show is a business activity. If you have not started trading yet, ad spend may still be claimable as pre-trading expenditure in some jurisdictions and structures, but the rules can be specific. If there’s no credible plan to trade, and no actual business activity, the deduction can be challenged.

Finally, if an expense is “dual purpose,” you may need to split it. For example, if you run ads to grow a personal influencer account that also occasionally promotes your services, you might need a rational basis for apportionment. The cleaner approach is to keep business advertising on business assets and accounts where possible.

Influencers, creators, and personal brands: special considerations

Creators, influencers, and people who trade under their own name can feel like they live in the grey area. If your personal identity is the business brand, promoting “you” can be promoting your business. The question is whether the ad spend is directly tied to generating income.

If you earn revenue from sponsorships, affiliate links, product sales, memberships, speaking engagements, or client services, and you run ads to grow your audience, then the advertising can be a commercial investment. However, your records should show that you operate as a business—contracts, invoices, regular activity, and a credible plan for profit.

The more your content looks like a commercial offering—clear calls to action, links to products, a service page, an email list, a media kit—the easier it is to justify advertising spend as business-related. Conversely, if the account mainly documents personal life with minimal commercial structure, the spend looks more like personal promotion than business advertising.

A useful discipline is to document the goal of the campaign. Keep short notes: what you promoted, the audience you targeted, the dates the campaign ran, and how it supports your income model. If you ever need to explain the spend, those notes are gold.

Boosted posts vs full campaigns: does it matter?

From a tax perspective, boosted posts and full campaigns are both forms of advertising. What matters is the business purpose and the evidence of payment. From a record-keeping perspective, however, boosted posts can be messier because they may be initiated quickly from a phone, tied to a personal profile, or paid via a consumer payment method without a clear invoice trail.

If you use boosted posts for business, consider setting up a dedicated business ad account and ensure your payment method and billing details are consistent. This helps produce cleaner statements and reduces the chance of personal and business spending getting tangled together.

Full campaigns run through an ad manager are often easier to evidence: you can show campaign objectives, ad creatives, and billing summaries. That extra context can help demonstrate the commercial intent if ever questioned.

Documentation you should keep

Good documentation is the difference between a confident claim and a stressful scramble. At minimum, keep records that show who you paid, how much you paid, when you paid it, and what it was for.

Most platforms provide invoices or billing statements. Download them regularly and store them somewhere safe. Ideally, invoices should show the supplier name (the platform or agency), your billing details, the date, and the amount charged. If a platform provides monthly billing statements, keep those too.

Keep proof of payment, such as bank statements or card statements that match the invoices. If you pay through a digital wallet, keep the transaction logs as well.

It can also help to keep campaign summaries or screenshots—especially for larger spends. This isn’t always required, but it provides extra clarity about what was being advertised. For businesses with recurring ad spend, a simple spreadsheet of campaigns and objectives can support the story behind the numbers.

If you use an agency, retain contracts, statements of work, and correspondence that describes the service provided. Agency fees are often separate from ad spend and should be recorded separately, even if the agency pays the platforms on your behalf.

How to treat agency fees, freelancers, and creative costs

Social media advertising costs often include more than just the ad spend. You might pay a freelancer to design creatives, edit video, write copy, build landing pages, or manage campaigns. These costs are usually business expenses if they are incurred for business marketing.

Agency management fees are typically deductible as professional services or marketing costs. Creative production costs (photography, videography, design) are usually also deductible, provided they relate to business advertising and not personal use.

Be careful when a deliverable has lasting value beyond a campaign. For example, a complete brand identity package or a large website build might be treated differently from routine advertising costs depending on local rules and accounting policies. For most day-to-day ad creatives, it’s generally treated as a marketing expense.

When you pay freelancers, ensure you keep their invoices and that those invoices clearly describe the work. Vague descriptions like “services rendered” are less helpful than “Facebook ad creative design for Spring Launch campaign.”

Home-based businesses and mixed-use issues

If you run a home-based business, you might already be familiar with mixed-use expenses—where personal and business usage overlap. Social media advertising can also become mixed-use if the account you’re promoting is used for both personal and business content.

Apportionment is the process of splitting an expense so you claim only the business portion. If you must apportion, use a method that is reasonable and consistent. For example, if a campaign promotes a specific business product page, it may be fully business-related even if the profile has some personal content. If the campaign is to grow a general lifestyle account that sometimes promotes your business, apportionment might be more appropriate.

The easiest solution is to separate business and personal assets where possible: business pages, business profiles, business ad accounts, and business payment methods. Separation reduces ambiguity and makes your bookkeeping cleaner.

VAT and sales tax considerations

Whether you can recover VAT (or similar consumption tax) on social media advertising depends on where you are registered and how the platform bills you. This is an area where people get caught out because digital advertising is often supplied across borders, and platforms may apply local tax rules based on your location and business status.

If you’re VAT-registered, you may be able to reclaim VAT charged on valid business invoices, provided the invoice meets requirements and the expense relates to taxable business activity. However, some platforms may not charge VAT in the way you expect, particularly for cross-border services, and you may instead need to account for tax under a reverse charge mechanism depending on your jurisdiction.

The key point is that VAT recovery is not automatic just because the cost is deductible for income tax. Keep your VAT records as carefully as your income tax records, and ensure your billing profile on the ad platform is set correctly for your business—legal name, address, and tax registration details where applicable.

Choosing the right bookkeeping category

To claim social media advertising properly, it helps to record it consistently. Many businesses use categories such as “Advertising,” “Marketing,” or “Online Advertising.” If you break it down further, you might use subcategories like “Social Media Ads,” “Search Ads,” “Influencer Marketing,” and “Agency Fees.”

Why does categorisation matter? First, it makes your accounts easier to understand, which helps you manage profitability. Second, it makes it easier to answer questions later if you need to demonstrate what the spend relates to. Third, it helps separate ad spend from management fees and creative production costs, which can be useful for evaluating return on investment.

If you pay in a foreign currency, record the amount in your accounting currency using the exchange rate applied by your bank or card provider, or in accordance with your accounting policy. Keep the platform invoice in the original currency as supporting evidence.

Cash basis vs accruals: timing of the claim

When you can claim the expense often depends on your accounting method. Under a cash basis approach, expenses are typically recognised when paid. Under accrual accounting, expenses are usually recognised when incurred, which often aligns with the invoice date or the period the advertising relates to.

Many small businesses use cash basis because it’s simpler, but not everyone can or should. Regardless of method, you should apply it consistently. If you are unsure which method you’re using, check your accounting settings or confirm with your accountant, because inconsistent treatment can create confusion.

For advertising, the practical difference is often small—ad spend is frequent and billed monthly—but it can matter around year-end. If you run large campaigns at the end of the year, you want to ensure you’ve captured invoices and payments in the correct period.

Pre-trading advertising: can you claim before you start selling?

It’s common to spend money on marketing before you officially “launch.” You might run ads to build a waitlist, validate a product idea, or announce an upcoming opening. In many situations, pre-trading marketing costs can be treated as allowable business expenses once the business begins trading, as long as they are genuinely connected to the business you go on to run.

The challenge is evidencing intent. If you run ads but never start the business, it becomes harder to argue the expenditure was for a trade. If you do start trading, keep records that show the connection between the pre-launch advertising and the subsequent business activity—such as your launch plan, website setup, or supplier arrangements.

If you are forming a company and the advertising spend happens before incorporation, treat the records carefully. You may need to record it as an expense incurred personally and then reimbursed by the company, or as part of director’s expenses, depending on your structure and local rules.

Advertising that also supports reputation or networking

Some advertising doesn’t directly promote a product. It might promote a podcast episode, a free guide, a newsletter, or thought leadership content. That can still be business advertising if the content supports your business model—building trust, generating leads, and maintaining visibility in your market.

The key is to show the commercial path. For example, if you run ads to a free guide that feeds into an email sequence selling your services, that’s clearly business-related. If you run ads to a video that simply builds your personal fame with no commercial offering, it becomes harder to justify. Many businesses live between these extremes, so keep a clear link between content and business outcomes where possible.

Networking promotions—such as advertising a talk you’re giving or promoting an industry event you’re hosting—are also often business-related, particularly if they lead to enquiries or paid work. Keep your records and ensure the activity is connected to your trade.

Promoting giveaways, competitions, and discounts

Giveaways and competitions can be powerful marketing tools, but they come with extra considerations. The ad spend to promote a giveaway is typically a marketing expense if the giveaway is intended to generate leads or sales. However, the cost of the prize itself is a separate matter and should be recorded accordingly.

Discount promotions are generally straightforward: advertising a sale, a limited-time offer, or a promotional code is part of marketing. Keep evidence of the campaign, and ensure the promotion is linked to your business sales activity.

If giveaways are structured in a way that primarily benefits the owner personally—such as giving away personal items or running a competition unrelated to the business—the expense may not be allowable. Keep the giveaway clearly aligned to your business offerings.

International advertising and overseas customers

If you advertise internationally, you might incur charges from platforms in different countries or face currency conversion fees. From a claiming perspective, international ad spend is still potentially deductible if it is for business purposes. But you should be particularly careful with invoices, exchange rates, and tax treatment.

Some platforms provide invoices through an entity in a particular country. Ensure your billing details reflect your business location and registration status. If you are VAT-registered or subject to other consumption tax rules, cross-border services can trigger specific accounting requirements.

Also consider whether your advertising relates to markets where you actually sell. If you spend heavily advertising to a country where you cannot legally supply your product or cannot fulfil orders, you may be asked why the spend is commercially justifiable. That doesn’t automatically make it non-allowable, but it does raise questions about business purpose and planning.

What about boosting posts for “engagement” only?

Engagement campaigns—likes, shares, followers, video views—are often criticised as vanity metrics, but they can still be legitimate marketing spend. The question is whether engagement supports your business. For many businesses, higher engagement means more reach, more trust, and more conversions over time. If your strategy is to build an audience that becomes customers, engagement campaigns can be part of a wider funnel.

To make engagement spend easier to justify, tie it to a business objective. For example, you might run engagement ads to seed content before launching a product, then retarget engaged users with conversion ads. Or you might use engagement to build social proof for your brand.

If you are boosting posts purely for personal validation or social status, it becomes harder to argue the expense is business-related. Keep your business strategy in mind and document your intent.

Red flags that can cause trouble

Some patterns are more likely to attract questions or cause headaches later. One is inconsistent record-keeping: missing invoices, ad spend paid through multiple personal cards, and no clear link between spend and business activity. Another is large ad spend relative to revenue without a coherent explanation—especially if it looks like personal promotion.

A third red flag is advertising expenses that appear to be private consumption. For example, paying to promote content about a personal holiday while your business is unrelated. Or paying to advertise an event that is essentially a personal celebration rather than a commercial activity.

Finally, mixing business and personal funds can create friction. If your business is serious about claiming expenses, use a business bank account and business payment methods for business advertising. This not only improves compliance but also makes your financial management clearer.

Practical steps to claim social media advertising confidently

If you want a clean and confident approach, you can implement a simple workflow. Start by using a dedicated business ad account and ensure the billing profile contains your business details. Use a business card or bank account for ad spend. Download invoices or billing statements monthly and store them in your accounting folder.

Next, record the expense in your bookkeeping software under an advertising or marketing category. If you pay both ad spend and agency fees, separate them into appropriate categories. Attach the invoice to the transaction where possible.

Then, keep a lightweight campaign log. This can be as simple as a note in your project management tool or a spreadsheet with columns for campaign name, objective, dates, spend, and the offer promoted. You don’t need to overdo it, but having a record of intent and activity helps establish business purpose.

Finally, review your advertising regularly. This isn’t strictly about claiming expenses, but it helps demonstrate that you are spending with a commercial mindset. If you can show you are measuring outcomes and refining campaigns, it supports the idea that the spend is a business investment rather than a personal indulgence.

How to handle refunds, credits, and chargebacks

Advertising platforms sometimes issue credits or refunds—perhaps due to billing disputes, failed campaigns, or promotional credits. When this happens, you should record the refund as a reduction of advertising expense or as other income, depending on how your accounting system is set up.

If you receive advertising credits, treat them carefully. Credits may reduce the amount you actually pay, but invoices and billing statements can show both gross and net figures. Ensure your accounting reflects what you truly spent and what was credited. Keeping the platform’s billing summary is especially useful here.

For chargebacks or disputed transactions, keep the correspondence and resolution. If the expense is ultimately not paid, it shouldn’t remain as a final cost in your accounts.

Frequently asked questions

Can I claim social media ads if I’m a sole trader or self-employed? In many cases, yes. Advertising that is for business purposes is typically allowable. The key is showing that the spend was incurred to promote your trade and is not primarily personal.

Can I claim ads if my business is new or not profitable yet? A lack of profit does not automatically prevent claiming legitimate business expenses. Many businesses invest in marketing before reaching profitability. The important point is that the activity is genuinely commercial and you have evidence of the business purpose.

What if I promote both my business and my personal profile? If your personal profile is the business brand, the spend can still be business-related, but keep the commercial link clear. If the spend has mixed purposes, consider apportioning and claiming only the business element.

Are influencer collaborations and paid shout-outs claimable? If you pay influencers or other accounts to promote your business and the arrangement is commercial, the cost is generally a marketing expense. Keep invoices, agreements, and evidence of the promotion.

Do I need an invoice from the platform? It’s strongly advisable. Invoices and billing statements are key evidence. If you can’t obtain a formal invoice, keep as much proof as possible: billing summaries, receipts, and payment confirmations.

Conclusion: yes, but make it clean and business-focused

So, can you claim expenses for business-related social media advertising? In most cases, yes—social media ads are a common and legitimate business expense when they are incurred for commercial purposes. The real work is in keeping the spend clearly tied to your business and maintaining solid records: invoices, proof of payment, and a clear explanation of what the advertising was meant to achieve.

If you separate personal and business activity, use consistent billing and bookkeeping practices, and document your campaigns at a basic level, you put yourself in the best position to claim the expense confidently. Social media advertising is a normal part of modern marketing. Treated professionally, it can be both a growth tool and a properly supported business deduction.