Can I claim Netflix and Spotify as a business expense?
I speak to a number of online entrepreneurs who want to claim things like Spotify and Netflix for tax purposes – the argument being that they use them for business too. 🧐
So, perhaps watching documentaries on Netflix, or listening to music on Spotify helps them concentrate.
Although there is nothing actually stopping you putting these through your annual accounts, they will then be disallowed (ie excluded from being an allowed expense) when it comes to the tax computation.
You see, people often say to their friends – well I claimed XYZ in my accounts – but then don’t realise that their Chartered Accountant then excluded it when it came to calculating tax. 🤯
And that is what we have to do with subscriptions like Netflix and Spotify.The reason is that they fall foul of a piece of the tax legislation which says that for expenses to be allowed for tax purposes they must be incurred “incurred wholly and exclusively for the purposes of the trade, profession or vocation”.
Netflix and Spotify have a dual purpose – they are business and personal – which means that they do not meet the “exclusively” criteria – which mean that we cannot claim them for tax purposes.
If you have any other accounting, tax or business related questions…feel free to reach out!
Thanks ever so much for taking the time to read my post I truly hope you’ve found it useful and insightful. If you have any questions feel free to contact us!
I am Annette Ferguson, CEO of Annette & Co. Chartered Accountant, Profit First Professional and creator of the Business Wealth Engine. We’re also SUPER social so don’t forget to follow. Here’s to your success!