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Local marketing is a core marketing strategy, especially if your business is mostly face to face or geographically based.
Which expenses are tax-deductible though? 😉
I’m going to take you through the 7 most popular ways of local marketing and whether they’re tax-deductible:
(and when cake is a tax-deductible expense).
Press is local media like newspapers and magazines that have a specific local or regional audience.
Being featured in your local newspaper is a great way to expand your reach and get known by more people in your local area.
Food and drink is not tax-deductible most of the time as it counts as ‘entertainment’. It’s still a business expense. You still need to account for it in your records.
If you are holding an event and have a local press journalist or photographer attend, it is tax-deductible if the venue require you to pay for their food and drink (keep records to prove this). It becomes an advertising expense. This was the case with my Demystify Limited Companies retreat when I needed to pay full rate for my videographer as he was there for the whole day (it wasn’t local press but you get the idea).
Printing is the backbone of local marketing.
This one is simple. It’s tax-deductible.
I’m sure there are some exceptions, but in nearly every case it’s tax-deductible. Another fabulous benefit for loving stationery 🙂
Cold calls are phone calls made to potential customers, who fit your ideal profile and who haven’t indicated any interest in what you’re selling, with the intent to ask them to sign up with you.
Warm calls are phone calls made to potential customers, who fit your ideal profile and who have indicated interest in what you’re selling, with the intent to ask them to sign up with you.
The phone calls are all tax-deductible. Keep records of the calls (your phone bill is just fine).
If you pay a company to do the calls for you, that’s tax-deductible too.
Door to door can be a great way to get your business better known in the local area and do local marketing.
You don’t need to be selling, you can share with people the problem your business is solving, without actively selling.
Food and drink, e.g. your lunch while you’re going door to door, isn’t tax-deductible. It’s for your personal benefit, so it isn’t included as ‘wholly and exclusively for business purposes’ which is the requirement for tax relief.
Clothing with your logo on (e.g. T shirt or fleece) is an exception from the ‘clothes are not tax-deductible’ rule. This is because the logo makes it into a marketing expense. Bear in mind that the clothing needs to be appropriate to your business and putting logos on all your clothes isn’t a cheap way to get tax relief.
On the other hand, going door to door as a yoga teacher with a logo’d Lululemon yoga top is totally tax-deductible #justsayin.
Networking is one of the fastest ways to get clients as a new business and is a fabulous local marketing strategy.
It’s also a contender for the Most Got Wrong Expense award.
That last one is where people get unstuck.
Food and drink at a networking event is only tax-deductible if it is included in the fee for attending. If you pay a separate fee to attend (or it’s free) and you pay for food and drink separately, it is not tax-deductible (learn more).
If you’re having a one to one meeting, that food and drink is also not tax-deductible, even if they suggested it #sorry.
Advertising is a common way of doing local marketing.
This one is simple. It’s tax-deductible.
I’m sure there are some exceptions, but in nearly every case it’s tax-deductible.
Attending an event is a great form of local marketing as well as an opportunity to sell.
That’s pretty simple. It’s nearly all tax-deductible.
Your food and drink when you’re attending an event is usually not tax-deductible.
There is an exception if you’re the one holding the event (remember, it needs to be a free event as we’re talking marketing expenses). Then food and drink is a marketing expense.
So if you offer cake at your local marketing event, the cake becomes a marketing expenses, not a food and drink expense.
Another exception is if you sell food and drink as part of your business (e.g. cake, cupcakes, brownies). Then the food are samples and are treated differently.
So, most local marketing expenses are tax-deductible. Pretty cool huh? 🙂
I hope my guide to which local marketing expenses are tax-deductible has helped you feel more confident, informed and empowered understanding what to do with your local marketing expenses.
If you need support with local marketing expenses for your tax return, get in touch.
If you’re interested in the Tick Off Your Tax Return retreat, only 5 minutes from the London Underground in ancient woodland, learn more here.
If you need an at-your-own-pace tax return course that’s easy to understand, have a look at How To Do Your Own Tax Return.
Try my free resources and download the expenses spreadsheet.