What can therapists claim as expenses? A UK private practice guide

Most therapists in private practice are sole traders, which means an annual Self Assessment and a recurring January question: what can I actually claim?

The general test is whether the cost was incurred wholly and exclusively for the purposes of the business. Below is how that usually plays out for therapy practice, plus the areas where people commonly get it wrong.

This is general information, not tax advice, and the rules change. An accountant who works with therapists is worth the fee.

Costs that are normally straightforward

• Clinical supervision. A requirement of practice for most registrants, and normally allowable.
• Professional body membership. BACP, UKCP, BABCP, NCPS and similar.
• Professional indemnity insurance.
• Room hire. Whether a regular room or ad hoc.
• ICO data protection fee. £52 a year for most sole practitioners (£47 by direct debit); needed if you hold client records electronically.
• Practice software. Notes, scheduling, invoicing, accounting, video calling.
• Website and directory listings. Counselling Directory, Psychology Today and similar.
• Stationery, printing and postage used for the practice.
• Accountancy fees.
• Bank charges on a business account, and payment processing fees.

CPD and training: the distinction that matters

CPD that maintains or updates skills you already use in your practice is generally allowable. Training that gives you an entirely new qualification or lets you enter a new area of practice is often treated as capital in nature and not allowable.

In practice: a two-day update on working with trauma, when you already work with trauma, is usually fine. A full diploma in a new modality is a much harder argument. The line is genuinely blurry and worth a conversation with an accountant if the sums are large.

Working from home

If you see clients at home or do admin there, you can claim a proportion of household costs. There are two routes: HMRC's flat rate simplified expenses based on hours worked, or an apportionment of actual costs by rooms and time used.

The flat rate is simpler and lower risk. Apportioning actual costs can be worth more if you use a dedicated room substantially, but keep the basis of your calculation written down.

Where people get it wrong

Personal therapy. The most contested item. It is frequently argued to have a dual purpose, personal benefit as well as professional, which fails the wholly and exclusively test. Where it is a mandatory training requirement the argument is stronger. Take advice rather than assuming.

Clothing. Ordinary clothes worn for work are not allowable, even if bought specifically for seeing clients.

Mixed-use phones and broadband. Claim the business proportion, not the whole bill, and be able to explain how you arrived at it.

Travel. Travel between work locations is generally allowable. Commuting to a regular base normally is not.

Keep the records as you go

The reason January is painful is almost never the tax. It is reconstructing a year of income from a bank statement.

Invoicing consistently through the year, with a clear record of what was issued and what was paid, turns Self Assessment into an export rather than an archaeology project. HMRC generally expect self-employed records to be kept at least five years after the 31 January deadline for that tax year, which is a different clock from your clinical records.

NoteSono Pro includes invoicing, payment tracking and card payments, so income records build themselves as you work. We've also written about invoicing for UK therapists and private practice admin.

Worth noting: a practice software subscription is itself normally an allowable expense.