Wondering whether you can claim Spotify as a business expense? Then read on! Many of us self-employed individuals work from home, listening to Spotify or watching Netflix while we are working. So does that make it tax deductible? Probably not.
In general, most of the things you buy in your business are tax allowable expenses. This is because if you weren’t in business you wouldn’t be paying for them. That’s things like work email subscriptions, a training course or website hosting. But some, like Spotify or Netflix, are slightly more tricky to claim.
The general rule is that expenses that are wholly and exclusively for work purposes are tax allowable. But expenses that may be used personally have duality of purpose so are disallowable expenses. Chances are you are using your Spotify or Netflix subscription personally making it unlikely that you can claim them when you fill in your tax return.
Where a clear portion of an expense can be proved as relating to business, like a laptop, then an apportionment of the expense can be made and an amount claimed as an allowable business expense. But you may be hard-pushed to convince the tax man about a clear apportionment of your subscription to Spotify or Netflix.
Read this guide to Self Employed Expenses to find out more about what you can claim on your tax return and get a list of allowable and disallowable expenses to keep for tax time.
Friendly Disclaimer: Whilst I am an accountant, I’m not your accountant. The information in this article is legally correct but it is for guidance and information purposes only. Everyone’s situation is different and unique so you’ll need to use your own best judgement when applying the advice that I give to your situation. If you are unsure or have a question be sure to contact a qualified professional because mistakes can result in penalties.