As a self-employed entrepreneur, you know that it costs money to run a business. So you may have asked: “Are marketing costs tax deductible?”

You’ve already experienced that “time is money” before you even incurred any running costs. So, what a relief it is, albeit small, that some expenses are allowable. This means that you may deduct them from your taxable profit.

But what about marketing costs? Are these necessary expenses included?

Are Marketing Costs Tax Deductible in the UK?

In this article, I will answer the question: are marketing costs tax deductible in the UK? Follow the example, and discover the official rules from the HMRC.

An Example

So you’ve begun to put your idea into action, and get your product out there. You’ve had a website built, and started advertising in newspapers and directories. 

Meanwhile, you’ve collected email addresses in exchange for sign-ups for your free samples. So you decided to send some mailshots for your bulk mail advertising.

In time, your efforts begin to pay off. As your client base grows, you spend more time entertaining clients, suppliers, and customers.

You even get your local community involved with event hospitality.

In time, it becomes clear that your marketing costs have become quite large.

So, are they tax deductible?

What Does Her Majesty’s Customs and Revenue (HMRC) Say?

According to Gov.uk, it’s not as simple as that. There are several parts involved. So let’s break this down.

Website Costs
Yes. Websites costs are tax deductible.

Advertising in Newspapers or Directories
Yes. Costs of advertising in newspapers or directories are tax deductible.

Free Samples
Yes. Costs associated with giving free samples are tax deductible.

Bulk Mail Advertising (Mailshots)
Yes. Mailshot costs are allowable and tax deductible.

Entertaining Clients, Suppliers and Customers
No. Contrary to popular belief, you may not treat such expenses as tax deductible.

Event Hospitality
No. You are not permitted to treat event hospitality expenses as tax deductible.

Conclusion

Don’t assume that you may treat all business expenses as tax deductible. This includes marketing expenses. The best practice is for you, your bookkeeper, and your accountant to check the rules often.

The rules do change sometimes and catch people out. So, it’s wise to avoid such a headache, especially for your small business.

So, happy marketing. I hope this advice has helped you, your bookkeeper, your accountant, or your client.

If so, please comment below. And I would also appreciate some shares to your social networks of choice.

Thank you.