Networking expenses can be a real bitch.
What’s tax-deductible, what isn’t?
Why are some items allowable off your tax bill in one situation and aren’t in another, hmmm? It’s enough to make your head spin.
I want to do more videos so I went to my local wood and made you a video giving you the lowdown of which networking expenses you can claim on your tax return
(because I’m freelance and I can do stuff like that randomly in the middle of the day).
Which Networking Expenses You Can Claim On Your Tax Return
First up, I’m assuming you’re a sole trader. If you’re a limited company, it’s mostly the same but it’s your company profits and accounts you’re dealing with, not your self assessment tax return.
(And if you’re thinking, WTF is the difference and what on earth am I, read this).
What Is Tax-Deductible?
- Travel – be it by car, camel, bicycle, bus, train, taxi, Tube
- The cost of your ticket or membership fee or both – for example, your annual membership fee for a networking organisation and the price of each event you attend
- Food & drink that is part of the cost for the event so aren’t a separate expense
What Is Not Tax-Deductible?
- Food & drink not part of the cost for the event
- When you can’t demonstrate that the event is wholly & exclusively for business, e.g. an executive’s golf membership even if they do most of their business down the golf course and they hate golf
A Real Life Example
I was invited to an event by a freelance photographer client who was covering it.
- My Tube travel there and back is tax-deductible (I have a record automatically sent to me by TFL)
- My ticket was free because my client received a few and I was one of the lucky ones (but it would have been tax-deductible if I could demonstrate the value to my business and why it was wholly and exclusively a business cost with incidental personal benefit)
- The cocktails and food were part of the ticket so not a separate expense (woohoo! This needs to happen more often!)
Another Real Life Example
A lunchtime business community get-together.
- Travel, tax-deductible
- Ticket, tax-deductible
- Camomile tea beforehand while I catch up on some work, not tax-deductible
- Lunch at the event, not tax-deductible
- Coffee with a client right after the event, not tax-deductible
All clear as mud right?
Once you understand HMRC’s view on food and drink and why they think most of it is Entertainment (not tax-deductible) rather than Marketing (which is tax-deductible) it’s not so brain stretching.
Which all shows why it is such a great idea to keep records of all that spending.
Because a) you need to legally, and
b) because it’s a damn good idea to know what you’re spending, why you’re spending it, and whether you get good value on your terms (I can help with this).
So, who’s for a cocktail?
I hope my guide to claiming networking expenses has helped you feel more confident, informed and empowered to understanding what you can claim as tax relief.
Do you understand more about networking expenses now? What about what you can claim – and can’t – as tax-deductible?
If you need support understanding networking expenses and what you can claim as tax-deductible in your business, limited companies, get in touch.
If you would love to do your tax return in a cabin in the woods, surrounded by bird song, only 5 minutes from the London Underground, have a look at the Tick Off Your Tax Return retreat.
If you need an easy to understand basics tax return course in normal English with a sense of humour, have a look at the How To Do Your Tax Return course.
Try my free resources and download an expenses spreadsheet.