What Business Expenses Can I Claim in Private Practice?

Running a business involves paying for various expenses to keep the business running. It is important to keep a log of these so you can submit these as part of your annual tax return. The cost of these expenses can be offset against the revenue you have earned and help to lower your tax bill at the end of the financial year.

For example, if your business generates £50,000 in the year and spends £10,000 on allowable expenses, then while there are some nuances to this, generally speaking the tax you owe will be based upon your £40,000 taxable profit.

This post will guide you through examples of expenses you can claim for your private practice based upon what is correct at the time of posting. This does not constitute financial advice and does not replace professional advice from a qualified accountant or financial advisor**

WHAT CONSTITUTE BUSINESS EXPENSES?

Business expenses are any 'allowable' expenses that you incur in the running of your business. 'Allowable' expenses are those that are deemed wholly and exclusively for the business. There are some rules around what HMRC deem to be valid as a business expense which you can find here. If you are a Limited Company then there can be some additional rules around these too, which we will cover too.

COMMON PRIVATE PRACTICE EXPENSES

Professional Fees and Subscriptions

• Membership fees for professional bodies (e.g., HCPC, BPS, BACP, UKCP)

• Insurance costs, such as professional indemnity and public liability insurance, cyber insurance, and for limited companies only, certain types of life insurance (see below)

• Legal consultancy fees related to the business (e.g. seeking advice re trademarking, developing terms and conditions, legal issues)

• DBS checks (if required for your work)

Training and CPD

• Costs for Continuing Professional Development (CPD) that directly relate to maintaining or improving skills required for your current profession or trade (e.g. training courses, accreditation costs, conferences)

• However, training for skills to train for another trade or profession (e.g., transitioning from one career to another) is not typically deductible. However, if doing so you could log those expenses in the new business accounting

• Clinical supervision and business coaching

• Audible / Spotify can be claimed as long as it is wholly and exclusively used for the business (Limited Companies will likely need an account in their business name)

• Journal costs

Marketing and Advertising

• Website hosting and design

• Private practice directories and advertising costs

• Printing business cards or marketing materials

• Online advertising and marketing (e.g. Google ads)

Travel and Mileage

• Travel expenses for business-related trips, such as attending conferences

• Travel to client locations

• Ordinary commuting travel from your home to main place of work (e.g. a clinic room) is not allowable as a business expense

• You may be able to claim travel to a clinic if your home is deemed your main workplace and your clinic is deemed to be a temporary workplace (HMRC have very particular rules about this here)

• Keep detailed records of your journeys, as HMRC requires proof (e.g. date, time and purpose of the journey, along with number of miles, and details of any parking fees, along with receipts)

• Food is not usually claimable unless you are travelling away from home

• Food and entertaining clients is not an allowable expense

• Parking fees while on business travel (save the parking tickets)

• Road tolls and congestion charges as part of business travel

• Fines and parking penalties occurred while on business travel are not allowable business expenses

Clinic Room Rental and Maintenance

• If you rent a therapy room or office for your practice, you can claim the rent as a business expense

• For those working from home, a portion of your home utility bills (like heating, electricity, and internet) may be claimed based on the space and time used for business

• Clinic cleaning and maintenance services

• Kitchen supplies (cups, plates, cutlery, kettle, microwave). If they are solely used for the clinic. If they are shared with other therapists then the claim cost would be apportioned.

• Waiting room items (tissues, radio, water cooler, glasses, furniture)

• Clinic furnishing (soft furnishings, sofas, chairs, lamps, clocks, plants etc). Again, if they are shared with other therapists then the costs would be apportioned.

• Where you rent out rooms to other therapists you may discuss with an accountant as to whether to structure this is as a separate clinic space rental business and as such, expenses for the set up and maintenance of this would fall under this business

Equipment and Office Supplies

• Computer equipment such as laptops, desktop, tablet, laptop bags, monitors, printers, ink, mouse, keyboard, USB ports, laptop risers, batteries, cables, headphones

• Mobile phone bill (either the cost of an additional sim card or a proportion of your personal bill) and phone handset if you purchased a separate one for business use

• Office equipment such as desks, office chair, lights, filing cabinet, tables and chairs (you may have to apportion this if this equipment is used for personal and business use, e.g. a home office)

• Stationery and other items such as notebooks, pens, stamps, books, printing of materials and resources

• Other miscellaneous items such as grounding or sensory objects, values cards, neurofeedback kits, EMDR kits, assessment measures, workbooks

Software and Tools

• Computing software packages or subscriptions (e.g. Windows, Finder, Microsoft office, Google Workspace, VPNs, antivirus protection)

• Subscription costs for practice management software or teletherapy platforms (e.g. Writeupp, Cliniko, Power Diary)

• Accounting software (Xero, Quickbooks)

• Design software (e.g. Canva, Adobe Creative Suite)

• Mailing list, website or membership site software (e.g. Mail Chimp, Calendly, Wix, Wordpress, Squarespace, Elementor)

• Project management and organisational tools (e.g. Asana, Trello, Monday)

Banking and Financial Services

• Business bank account monthly fees if you have them

• Fees for payment processors (e.g. PayPal, Stripe, Go Cardless)

Employee and Freelancer / Contractor Costs

• Employee salaries

• Fees for freelancers such as bookkeepers, accountants, virtual assistants, web designers, IT support services, copywriters,

Work Related Clothing

• Company branded clothing is classed as a uniform and therefore allowed, NOT standard clothing hence typically we cannot claim work clothing

Health and Wellbeing

• Wellbeing related expenses such as gym memberships are NOT allowed

• Physiotherapy due to sitting in constrained positions for extended periods of time could be argued as an allowable expense

• You can claim for the cost of prescription glasses and contacts if used solely for the business, and apportioned if used for personal and business

EXTRA EXPENSES FOR LIMITED COMPANIES

An Annual Party

• Limited Companies are allowed to claim expenses for an annual party which could be a Christmas party or a summer BBQ for example

• You are allowed to claim up to £150 for each company director and employee, you are also allowed to bring a guest and have a £150 per head value for them too

• You cannot claim for over this amount and use the £150 towards it as it is not an allowance

• This expense can be used on food, drink, travel or accommodation

Trivial Benefits Exemption

• Directors and employees of a limited company are allowed small infrequent benefits without paying tax or national insurance on them

• The benefit must cost £50 or less (including VAT) per person because if the benefit exceeds £50 then the whole benefit is taxable

• You are allowed up to £300 worth of trivial benefits in any one tax year (if in a company controlled by five or fewer shareholders)

• The benefit must not be in the form of cash or a voucher that can be exchanged for cash. So gift cards are acceptable (e.g. Amazon, Next, Argos, Love to Shop, Tesco etc)

• are also allowed to claim a £50 voucher as an allowable expense for to the value of £300 per year

• Examples of such benefits could be a box of chocolates, flowers, a bottle of wine, a meal or takeaway for staff, small festive gifts, non-cash gift cards

• Such benefits that meet the criteria do not need to be reported on a P11D or taxed as a benefit-in-kind.

• You must keep clear records of such gifting and the reasons for the benefit

• Keep the gifting infrequent so it meets HMRC guidelines

Life Insurance

• Directors and employees of limited companies can have life insurance paid for by the limited company as a business expense. Typically this is a 'relevant life' insurance or 'group life insurance scheme'

• HMRC doesn't consider this to be a 'benefit in kind' expense so it can be a more cost effective way of paying for life insurance than paying out of your post tax pay

Further Resources

HRMC details all the information you need to know to find out what expenses you can claim if you are self employed:

https://www.gov.uk/expenses-if-youre-self-employed

An accountant that understands private practice businesses is a good person to consult to find out more about how to ensure you are managing your business finances most effectively.

An Independent Financial Advisor is great for guidance on types of financial products you may wish to access within your business.

The Private Practice Suite Business Consultations

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*CONTENT DISCLAIMER

The information contained above is provided for information purposes only. The contents of this article are not intended to amount to financial advice and you should not rely on the contents of this article to make decisions for your business. Professional advice should be obtained to explore your personal circumstances before taking or refraining from taking any action as a result of the contents of this article. Dr Sarah Simmonds, Trading as The Private Practice Suite disclaims all liability and responsibility arising from any reliance placed on any of the contents of this article.

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