Can I claim accountancy and bookkeeping fees as a business expense?

Yes, in most cases. Fees for your business accounts, bookkeeping and Making Tax Digital software are normally allowable for 2026-27. Fees for the personal parts of your tax return, tax appeals, penalties and some fee protection insurance are not.

The rules below follow GOV.UK, HMRC's manuals and the 2026 tax return notes, as checked on 17 October 2026.

The basic rule

Section 34 of the Income Tax (Trading and Other Income) Act 2005 stops you deducting a cost that is not incurred wholly and exclusively for the trade, though where a cost has more than one purpose you can deduct an identifiable part that is. GOV.UK says accountancy, legal and other professional fees can be allowable, including hiring accountants only for business reasons. HMRC's manual adds that professional fees which are capital are not allowable, and GOV.UK gives the legal costs of buying property and machinery as an example.

Accounts, bookkeeping and the self-employment pages

HMRC's manual says fees for preparing accounts for commercial reasons, and for many other accountancy services, pass the wholly and exclusively test. In our reading, that covers a bookkeeper keeping your business records and an accountant drawing up your year-end figures.

Strictly, the extra cost of working out and agreeing the tax on your trading profit is not allowable. HMRC has a longstanding practice of allowing it anyway, as long as it is a normal, recurring cost of preparing the accounts or agreeing the tax.

The personal parts of your tax return

That practice does not stretch to personal tax. HMRC's manual says the costs of completing a tax return, or of working out Capital Gains Tax, are not allowable against trading profits. GOV.UK's own list of costs you cannot claim includes the cost of preparing and submitting your Self Assessment tax return. It does not split the fee, and says to contact HMRC if you are not sure. Read alongside the manual, our reading is that the business accounts part of the work is still allowed.

Many tradespeople pay one fee covering both their business figures and their return. HMRC's manual says the personal part is likely to be minimal if, apart from the business, your tax affairs are straightforward. If you also have rental income, shares or a property sale to report, the personal share is likely to be bigger.

Software and quarterly updates

GOV.UK says computer software can be claimed as an expense if you pay regularly to renew the licence, even if you use it for more than 2 years. In our reading, a monthly Making Tax Digital (MTD) software subscription for the business fits that description. It goes in office costs, not professional fees.

HMRC's manuals we checked do not name MTD quarterly updates. In our reading, paying someone to keep your digital records and send your updates is a bookkeeping service for the business, so it follows the same rule as other bookkeeping.

CIS refunds

For a sole trader, GOV.UK says Construction Industry Scheme (CIS) deductions are claimed back through your Self Assessment tax return, and HMRC takes them off the tax you owe. The guidance we checked does not deal with a fee to a company that claims a CIS refund for you. In our reading it is a cost of your tax return, so the personal-return rule above may limit it. If the fee also covers your business accounts, that part follows the accounts rule.

Enquiries, appeals and insurance

For a fee protection policy, HMRC's manual says the premium cannot be split, so a policy that covers some disallowable costs is disallowed in full, even if you never make a claim.

Fines, penalties and interest

HMRC's manual says interest on Income Tax charged under the Taxes Management Act 1970, interest charged under the CIS and a list of HMRC penalties cannot be deducted. For penalties not on that list, it says they are not normal costs of agreeing your tax and are unlikely to be for the purposes of the trade. GOV.UK adds that fines for breaking the law cannot be claimed.

What this means for you

Most of what you pay for business bookkeeping, accounts and software reduces your profit. The personal part of a tax return fee, appeal costs, penalties and some insurance do not.

On the cash basis, you claim a fee when you pay it. GOV.UK says the cash basis became the default from 6 April 2024, and traditional accounting, where costs are recorded when you are billed, is a choice. For a continuing business, HMRC allows enquiry costs in the period they were incurred.

On the 2025-26 short self-employment pages (SA103S), fees go in box 16, accountancy, legal and other professional fees, and software in box 18, office costs. With turnover below £90,000 you can put one total in box 20. On the full pages (SA103F), fees go in box 28. The notes say the costs of settling tax disputes are disallowable, so if you include them in box 28 you also put them in box 43. Under MTD, use "Accountancy, legal and other professional fees", one of the same categories as Self Assessment.

Steps to claim your fees

1. Keep every invoice from your bookkeeper or accountant and every software receipt.
2. Ask for invoices that show business work and personal tax work separately, if you have other income or gains.
3. Record the business part under accountancy, legal and other professional fees, and software under office costs.
4. Leave out penalties, interest, appeal costs and the personal share of any return fee.
5. Read your fee protection policy to check what it covers before you claim the premium.
6. On the cash basis, claim each fee in the tax year you paid it.

The free MTD check shows when Making Tax Digital starts for you, and the trades section has more guides.