Allowable expenses for UK consultants.

The HMRC test

For limited company consultants, the test is whether the expense was incurred wholly and exclusively for the trade. Personal benefit fails the test (or requires apportionment). The same standard as sole traders, but with the salary/pension flexibility limited companies offer.

Commonly allowable

• Travel to client sites - mileage at 45p/25p, train fares, taxis. Not commuting to a regular workplace.
• Subsistence on overnight client work - meals, hotels.
• Professional indemnity insurance - often contractually required.
• Professional body memberships - CMI, IoD, ICAEW, ACCA, MBA alumni associations.
• Research subscriptions - Bloomberg, McKinsey Insights paid tier, Harvard Business Review, industry-specific databases.
• Software subscriptions used for client work.
• Conferences and training to maintain existing skills.
• Equipment - laptop, monitor, presentation tools (via Annual Investment Allowance).
• Marketing - website, content, paid social, business cards.
• Subcontractor fees for specific project deliverables.
• Home office - flat-rate £26/month or apportioned actual costs.
• Phone and broadband - business proportion or dedicated business contracts.

Commonly rejected

• Client entertainment - never allowable as a Corporation Tax deduction. Staff entertainment up to £150/head/year is, with strict conditions.
• Normal clothing - even if only worn for client meetings.
• Commuting to a regular workplace.
• Training in a new trade unrelated to your existing consulting work.
• Personal expenses dressed up as business: gym memberships, gardening, personal grooming.
• Fines and penalties.