Is advertising and marketing
tax deductible?

Yes. Advertising in newspapers or directories, mailshots, free samples, online ads and website costs are allowable (GOV.UK). The exceptions are entertaining clients and customers and most gifts, which are not allowable even when they are part of a marketing plan (SA103F notes).

Almost everything you spend to find customers is allowable: paid ads, leaflets, business cards, a listing in a trade directory, a stand at a trade show, a logo from a designer, photographs of your work. The tax rules only bite on two kinds of promotion: entertaining people and giving them gifts, which the law treats separately whatever their marketing value.

Is advertising and marketing tax deductible?

The HMRC rule

Advertising, mailshots, free samples and website costs are allowable. The rule comes from Marketing, entertainment and subscriptions, Work out your rental income when you let property.

GOV.UK lists advertising in newspapers or directories, bulk mail advertising (mailshots), free samples and website costs as allowable, and excludes entertaining clients, suppliers and customers, event hospitality and most gifts (marketing, entertainment and subscriptions). The SA103F notes put advertising in box 24, with any entertaining also shown in the disallowable box 39 (SA103F notes). Landlords can deduct direct costs such as advertising for new tenants (landlords).

When you can claim it

• Online ads, including search, social media and marketplace promotion.
• Print adverts, leaflets, flyers, business cards and signage.
• Trade show stands, directory listings and review platform subscriptions.
• Marketing agencies, copywriters, designers and photographers.

When you cannot

• Taking clients or prospects to lunch, drinks or events.
• Gifts to clients, other than small gifts carrying a conspicuous advert.
• Hospitality at events you run, such as free food and drink for guests.
• Personal social media promotion unrelated to the business.

What to claim instead

If you want to build relationships with clients, the cost of meeting them is generally not allowable, but content, events for the public without hospitality, and branded items under £50 can do similar work and are allowable. Staff events are allowable too.

How to decide if you can claim it

1. Was it for the business? A cost is only allowable if you incur it wholly and exclusively for the business. If it also serves a personal purpose that cannot be separated, such as clothing that keeps you warm or a meal that keeps you going, HMRC disallows it.
2. Is part of it personal? Where a cost has a business part you can identify, such as the business calls on a phone bill or the business miles in a car, you claim that part and leave the rest out, on a reasonable basis you can explain.
3. Is it a running cost or something you keep? It is a running cost, so on the cash basis it counts when you pay it and on traditional accounting when you incur it. Nothing about it needs spreading over later years.
4. Is there a specific rule? For advertising and marketing, the deciding rule is advertising and marketing: advertising, mailshots, free samples and website costs are allowable.

Worked example: a dog groomer’s marketing

A dog groomer spends £900 on social media ads, £250 on leaflets, £180 on branded van signage, £120 on a local directory listing and £300 taking a pet shop owner who refers clients out to dinner twice. The £1,450 of advertising is allowable. The £300 of dinners is business entertainment and is not.

Online advertising

Paid search, social media ads, promoted marketplace listings and sponsored posts are allowable advertising, as are subscriptions to tools used to run them, such as scheduling or email marketing software. Paying influencers to promote your products is advertising too, although gifting products to influencers without an agreed promotion can look more like a gift. Keep the ad platform's invoices, which are often issued monthly and may be in another currency.

Branding and design

A logo, brand guidelines and business card design are generally allowable marketing costs. A substantial brand creation project, such as a trademark registration or a full rebrand intended to last many years, can be closer to capital, especially on traditional accounting. For most small businesses, design costs are modest and treated as ordinary running costs.

Signage and vehicle livery

Signs and van livery are advertising. On traditional accounting, a permanent illuminated sign fixed to premises can be plant, attracting capital allowances rather than being an expense. On the cash basis, it is usually an expense in the year you pay. Vehicle wraps are generally treated as running costs, but check if they add long-lasting value to the vehicle.

Free samples and promotions

HMRC's manual says the cost of free samples given to the public to advertise your goods is deductible, because giving away your own goods to advertise them is not business entertainment. Discounts and promotional offers simply reduce your sales. Competitions with prizes are generally allowable if the prize promotes the business.

Networking and events

The cost of a stand at a trade show, or a ticket to a business networking event, is allowable. Food, drink and hospitality you provide to guests at your own event is business entertainment, and is not. If a ticket includes a meal, most advisers treat the ticket as allowable where the main purpose is business networking rather than hospitality.

Where it goes

Advertising goes in advertising and business entertainment costs, box 24 of the full self-employment pages. If you include entertaining in the same box, put the entertaining figure in box 39 as well. Landlords put advertising for tenants in box 29 of the UK property pages.

If you are a landlord

Landlords can deduct the cost of advertising for new tenants, including listings on property portals through an agent (GOV.UK). It goes in other allowable property expenses, box 29, or with letting agent fees if the agent charges for it.

Where it goes on your return and in MTD

On the self-employment pages of your return, the claimable part of advertising and marketing belongs in advertising costs (SA103F box 24). The same category is used in Making Tax Digital quarterly updates, so recording it in the right place once keeps both returns consistent.

For a landlord, it belongs in other allowable property expenses (SA105 box 29 on the UK property pages), and in the matching category of a Making Tax Digital property update.

If your turnover was under £90,000, you can use the short self-employment pages (SA103S), which ask for a single figure for total allowable expenses rather than a box-by-box breakdown, and the full pages let you give just a total in box 31 too. The category still matters for your own records and for Making Tax Digital, where each quarterly update uses the same categories unless you choose to send one consolidated figure.

The accounting basis changes when a cost counts. On the cash basis, the default for sole traders since 2024/25, it counts when you pay it; on traditional accounting, when you incur it, with things you keep claimed through capital allowances.

How much an allowable cost saves

An allowable expense does not come back to you in full: it reduces your profit, so it saves tax at your marginal rate. For a sole trader in England, Wales or Northern Ireland that is 26p in the pound at the basic rate (20% Income Tax plus 6% Class 4 National Insurance) and 42p at the higher rate. The sole trader tax calculator works out the figure for your own profit.

What £1,000 of allowable expense saves a sole trader in 2026/27

• Basic rate (20% + 6%)£260
• Higher rate (40% + 2%)£420
• Additional rate (45% + 2%)£470
• Allowance taper band (60% + 2%)£620

Records to keep

Keep invoices and a copy or screenshot of each advert, campaign or listing, with a note of what it promoted. For events, sponsorship and gifts, keep a note of who was involved and what the business got in return. Records must be kept for at least five years after the 31 January deadline for the tax year.

If Making Tax Digital for Income Tax applies to you (qualifying income over £50,000 from April 2026, £30,000 from April 2027 and £20,000 from April 2028), the records must be digital, and each quarter's costs go into a quarterly update. Check your date with the MTD requirement checker.

Common mistakes

• Calling client lunches marketing.
• Claiming gifts to clients that do not meet the small gifts rule.
• Missing ad platform invoices charged to a personal card.

Related expenses

This item sits in the advertising costs category, alongside sponsorship and website and domain costs. The A to Z of expenses answers the same question for every other cost.

If you record your costs in TapTax, each one lands in the HMRC category it belongs to, with its receipt attached, so your quarterly updates and year-end return use the same figures.