Can I claim advertising and marketing costs as a sole trader?

Yes. In 2026-27, most advertising is an allowable expense: online ads, leaflets, business cards, directory listings and website running costs. A website build is usually capital, and entertaining customers is not allowable.

The rules below follow GOV.UK, HMRC's manuals, the legislation and the 2025-26 tax return notes, as checked on 17 October 2026.

The test for marketing costs

Section 34 of the Income Tax (Trading and Other Income) Act 2005 says a cost must be incurred wholly and exclusively for the trade. GOV.UK lists advertising or marketing among the costs you can claim, and names advertising in newspapers or directories, mailshots and website costs.

For scheme registrations and trade body fees, see our guide on trade scheme and registration fees. For branded workwear, GOV.UK allows uniforms that are not everyday clothing, and costumes used to advertise your business unless they are everyday clothing; our work clothes guide covers where the line falls.

Van signwriting and wraps

We found no GOV.UK or HMRC manual page on van lettering, so the answer depends on how you claim for the van.

• Actual costs. In our reading, lettering paid for to advertise is an allowable cost. HMRC's manual treats spending on permanent hoardings or other durable advertising apparatus as capital. On the cash basis that matters less: GOV.UK says vans and other equipment you keep and use are claimed as normal expenses. Under traditional accounting, in our reading, a wrap meant to last years may go through capital allowances instead.
• Mileage rate. HMRC's manual says the rate covers buying, running and maintaining the van, and that no actual expenditure can be claimed in relation to that vehicle. It does not say whether lettering is caught. If you use the rate, check with HMRC before claiming a wrap separately.

Your website: build versus running costs

HMRC's manual says the regular update costs of a website are likely to be revenue, and the original cost of creating it capital, if the site has the lifetime expected of a capital asset. It compares a website to a shop window: building the window is capital, changing the display is revenue.

Hosting, domain renewals and a website builder you pay for monthly are, in our reading, running costs. GOV.UK also says software you pay for by regular licence payments is an allowable expense.

For the build itself, GOV.UK says software used for 2 years or more, without regular licence payments, goes through capital allowances under traditional accounting. HMRC's manual puts website set-up costs in its software chapter, so in our reading a build follows the same route. On the cash basis, the law allows most capital costs but blocks some intangible assets, and in our reading it is not clear-cut whether a website is one. For a large build, check before claiming it all up front.

Sponsoring a local team

HMRC's manual says sponsorship is often a form of advertising, and the costs are allowable unless they are capital, not wholly and exclusively for the business, or specifically disallowed, such as entertaining. HMRC normally disallows the value of any tickets or other benefits in the package. If there is any personal purpose, none of it is allowed, and the manual says there may be one where the sponsored person is a relative or close friend, or where you are personally involved in the activity.

What you cannot claim

GOV.UK says you cannot usually claim the cost of entertaining clients, suppliers or customers, such as hospitality at events, tickets, or lunch at a work meeting. HMRC's manual says this is barred even when it is wholly for the business.

Branded items such as pens or diaries are an exception if gifts to that person total £50 or less in the tax year, as long as they are not food, drink, tobacco or vouchers. So are free samples of things you sell. Our guide on gifts and entertaining clients covers the detail.

Where it goes in your records

GOV.UK says Making Tax Digital (MTD) uses the same categories as Self Assessment. Allowable marketing goes under "Advertising". Entertaining goes under "Business entertainment costs", and the tax return notes say that if you include it, you also put it in the disallowable box.

On the cash basis, the standard method for sole traders, you record an expense when you pay it. If your self-employed turnover is under £90,000, GOV.UK says you can just record each item as income or an expense.

A worked example

A self-employed electrician on the cash basis, claiming actual van costs, pays these in 2026-27:

The listing and lettering lines follow our reading above, and the sponsorship assumes no family link and no tickets in return. On the mileage rate, the lettering line would need checking first. This is an example only.

What this means for you

Money spent putting your name in front of new customers usually comes off your profit. A website build and a long-lasting wrap can be capital, and entertaining customers does not count.

Steps to claim your advertising costs

1. Gather invoices for ads, listings, print, your website and any sponsorship.
2. Split website costs into the build and running costs.
3. Check your van method before claiming any lettering.
4. Take out entertaining and any tickets or hospitality from sponsorship.
5. Unless you use simpler categorisation, record each cost under "Advertising" in your MTD software.

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