Accountancy fees - tax deductible for sole trader
C asked whether they were right in thinking that the accountancy fee for payroll services and producing the annual accounts for a small client were tax deductible, but not the fee for completing and submitting the tax return, in a query dated 23 April 2007. If this is correct, should the fee for preparing the accounts and calculating the tax due be separated from the fee for preparing the tax return?
Steve confirmed that the fee for completing the tax return was deductible in the case of a sole trader. This extra cost would be minimal in the case of a small sole trader.
This subject is addressed in the HMRC Business Income Manual at BIM46450. Strictly speaking the cost of preparing the accounts comes within th...