Are Professional Fees Tax Deductible? | UK Tax Guide

​Are Professional Fees Tax Deductible? A Guide for UK Businesses

When running a business, professional services are often essential – whether it’s accountants, solicitors, or consultants.

But a common question business owners ask is: are professional fees tax deductible? The answer depends on the nature of the fees and whether they meet HMRC’s rules for allowable expenses.

Understanding What Makes an Expense Allowable

To determine are professional fees tax deductible, HMRC uses the “wholly and exclusively” test.

This means that for fees to be deductible, they must be incurred wholly and exclusively for business purposes.

If the fee has a dual purpose (partly business, partly personal), then it usually won’t qualify as fully deductible.

Are Professional Fees Tax Deductible for Accountancy Services?

In most cases, yes. Routine accountancy costs, such as preparing annual accounts, bookkeeping, and tax returns, are generally deductible.

These services are clearly linked to running the business, and therefore pass HMRC’s test.

However, some accountancy fees are not allowable – for example, the cost of preparing a personal tax return if it relates to your private income.

​Legal and Consultancy Fees – Are Professional Fees Tax Deductible?

When it comes to legal and consultancy costs, the rules become more complex. For example:

  • Deductible fees – legal advice on debt recovery, drafting contracts, or employment matters.

  • Non-deductible fees – costs linked to acquiring a new business, buying property, or handling personal disputes.

The distinction often comes down to whether the expenditure is capital (long-term asset acquisition) or revenue (day-to-day running of the business).

Common Examples of Deductible Professional Fees

  • Accountants’ fees for statutory accounts and tax compliance

  • Legal advice relating to trading contracts

  • Fees paid to consultants for business strategy or HR advice

  • Professional subscriptions (if relevant to your business sector)

These examples make it clearer when answering are professional fees tax deductible in practice.

Common Mistakes Business Owners Make

  • Claiming for personal tax return fees as a business expense

  • Treating capital-related professional fees (like property purchases) as deductible

  • Not keeping detailed invoices that separate personal and business costs

Mistakes like these can trigger HMRC challenges, so it’s vital to understand where the line is drawn.

​How Trueman Brown Can Help

At Trueman Brown, we specialise in guiding businesses through the complexities of tax. If you’re unsure about are professional fees tax deductible, we’ll review your expenses, make sure you’re compliant with HMRC, and help you maximise legitimate deductions.

📧 Email: mark@truemanbrown.co.uk
📞 Phone: 01708 397262

We work with local businesses across the UK, offering practical tax advice tailored to your situation.

FAQs

1. Are professional fees tax deductible if they relate to a personal issue?
No – only fees wholly and exclusively related to the business are deductible.

2. Can I claim solicitor fees against tax?
Yes, if they are for business matters such as contracts or debt recovery. No, if they relate to personal disputes or capital acquisitions.

3. Are accountancy fees for self-assessment deductible?
They are deductible if they relate to business income, but not if they are only for personal tax affairs.

4. How do I prove my professional fees are tax deductible?
Keep detailed invoices and clear records showing the purpose of the fees.

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