Marketing expenses for contractors: what can your company claim?

If you are a professional contractor, you may need to invest in marketing to win new work – but can these costs be offset against your company’s tax bill?

At a glance: what you can and can’t claim

What does marketing have to do with contracting?

At first glance, marketing and PR might seem far removed from the day-to-day life of a typical professional contractor.

Many small firms invest in physical and online marketing activities – from promotional flyers printing to building a web presence and investing in social media ads.

However, competition for many roles has increased in recent years, and web technology has expanded the number of channels through which hirers can find workers.

At the same time, the number of methods available to contractors to promote their services has increased significantly.

Setting aside a modest chunk of your company’s profits for marketing and publicity may significantly increase your chances of securing fresh sources of contract work.

Typical marketing and promotion expenses for contractors

Here, we look at how marketing costs are treated by HMRC and have compiled a list of typical marketing costs you may encounter as a contractor.

LinkedIn profile review

Paying for a professional LinkedIn profile review – to make sure your profile stands out to potential hirers, achievements are listed in the correct order, the right keywords are used, and your content is primed for recruiter searches.

LinkedIn Premium

LinkedIn is an essential tool for professionals. You can upgrade to the Premium version, which gives you an edge, including InMail, which lets you message any LinkedIn member, as well as access to job insights and ‘Learning’ courses.

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Professional CV review

Paying for a professional CV review – your CV should be concise, focusing on relevant experience and skills. Since many recruiters judge a CV within seconds, this is a worthwhile cost for a minimal outlay.

Social media expenses

Social media/web-based profile costs include advertising on Google AdWords, promoted tweets, and other measures to boost your online profile, including LinkedIn Premium (see above). From our experience, LinkedIn dominates the contractor world in terms of gaining visibility – so don’t spend time on other platforms until you’ve exhausted your efforts there.

Website for your company

Creating a website for your company – this needn’t be an expensive exercise. For many tech-savvy contractors, you can simply use an out-of-the-box CMS, such as WordPress. However, unless you have design experience, you may need to pay for the one-off costs of creating a logo and/or designing your core website templates.

Web hosting

The ongoing costs of hosting your site on shared or dedicated web servers. For most contractors’ needs, a shared hosting package is more than enough – often costing under £100 per year.

Search Engine Optimisation

You may benefit from professional help to boost your website rankings, though we’d urge you to exercise caution, as Google can easily spot unnatural activity. Writing great content and securing relevant, high-quality inbound links to your company site remain the most reliable ways to improve your search engine rankings.

Domain names

Securing a domain name will provide your company with a professional image. You can use the name for your custom website and business emails. Domain names are inexpensive (often under £30 for a 2-year .com name and under £15 for a 2-year .co.uk name); however, you must renew them periodically.

Stationery costs

A wide variety of physical products, including business cards, professionally printed company paperwork (for those increasingly rare offline communications), pens, paper, notepads, etc.

Traditional advertising costs

You may also incur costs to advertise your services in magazines and newspapers, and on websites.

For more ideas, read our further ideas about promoting yourself as a contractor.

The tax treatment of marketing expenses

As with all types of expenses, you can legitimately reclaim the cost of all sales and marketing costs you incur, as long as they are wholly and exclusively for business, such as those listed in the previous section.

You can read the ‘golden rules’ of expenses here.

In practice, this means the cost must be incurred to generate or support your company’s income, not for personal use.

However, there are significant exceptions, particularly entertainment expenses, which cannot be offset against your limited company’s Corporation Tax bill.

You can claim sponsorship costs (e.g., for a local sports team) as a business expense. Still, charitable donations that do not directly benefit your business in return are not treated as expenses in your accounts. However, they may still reduce your Corporation Tax bill.