Can psychotherapy or counselling be a business expense?

A question that is often asked of us whether or not psychotherapy, and indeed counselling or clinical psychology, can ever be claimed as a legitimate business expense?

What are business expenses?

Business expenses are classified as allowable expenses which constitute the running costs of your business. These will, obviously, vary from business to business. The question of whether psychotherapy is a legitimate business expense therefore applies to people who are self-employed, ranging from freelance workers through to business owners (although for limited companies slightly different rules apply).

How can psychotherapy ever be a business expense?

The answer to this is yes, often it can. For example, any counsellor, psychotherapist or clinical psychologist can legitimately claim their own personal therapy as a business expense. Not only is this appropriate as an expense, but it is arguable that all mental health clinicians should be in their own ongoing personal therapy for self-development and to ensure that they are being appropriately supported in the emotional work they do with their clients.

However, in my own practice I have many clients who claim their personal psychotherapy as a business expense and who work in completely unrelated fields ranging from property development through to creative endeavours such as musicians. So how is this justified?

What is psychotherapy?

Counselling, psychotherapy and clinical psychology all wall under the heading of ‘talk therapy’. They are concerned in similar ways with helping people to work through loss and trauma. However, both the concept of ‘talk therapy’ and the idea of ‘working through loss and trauma’ cover an enormously large remit and in many instances, this remit impacts upon our ability to work. Let’s consider an example:

Sarah, a freelance musician, has recently been offered a position playing with a major orchestra. This has come about as a result of many years of hard work and dedication; it offers the potential of being the pinnacle of her career. However, to her utter astonishment she notices that every time she joins the new orchestra for rehearsals, she experiences sleepless nights and strong symptoms of anxiety that impact on her ability to play to the best of her ability. Clearly, in this example, Sarah would both benefit from psychotherapy and it can be legitimately argued that psychotherapy for her performance anxiety is a legitimate business expense.

The reasons for Sarah’s anxiety could be numerous ranging from an unconscious fear of success rooted in her mother’s option of her, through to feelings of inadequacy and shame around ‘being seen’. However, from a business expense perspective, the causes are less important that the manifestation of Sarah’s symptoms – her anxiety is impacting on her ability to ply her trade.

Is psychotherapy only a valid business expense in times of personal crisis?

Many people initially enquire and start psychotherapy when they hit a crisis – in other words when their symptoms become debilitating, or at least too distracting to ignore any longer.

So, whilst the initial part of any psychotherapy process often overtly works with the crisis the client brings, the underlying process will be addressing deeper relational issues. It is not uncommon for clients to expect to undergo a period of psychotherapy which then turns into a deep, meaningful, intimate and ongoing relationship that continues week after week. And, in many instances, long-term ongoing psychotherapy remains a valid business expense.

Most businesses are comprised of relationships. Whether that simply means working on behalf of external clients, through to being a part of a team or leading an organisation. And as psychotherapy is a relational process of deepening ones understanding of self through the unique relationship with a psychotherapist, many clients continue to find that an ongoing process of psychotherapy becomes an asset to how they manage stress and anxiety and in turn their relationships with their colleagues.

Can couple therapy be a business expense?

Again, the answer to this depends on how the couple relationship is intertwined with the business.  For couples who run a business together – often a complex and stressful experience – couple therapy or marriage counselling can be both invaluable in stabilising the relationship but also in assisting the couple in improving dialogue with each other so as to improve their working relationship. In such a context couple therapy would be a valid business expense.

What if I am not self-employed?

Business expenses apply to those who work for themselves and submit their own (or company) tax returns. So, if you are employed, clearly psychotherapy cannot be a business expense, however, this does not necessarily mean that you cannot get help or support in attending and/or paying for psychotherapy.

Private health insurance

Increasingly private health insurance is offered as a benefit to salaried workers and most private health insurance providers provide cover for psychological support from appropriately trained and registered counsellors, psychotherapists and clinical psychologists. This cover may be capped in terms of a value amount or in terms of the number of sessions, so it is worth checking with you provider to find out more.

Time off to attend psychotherapy

And lastly, where employers may not choose or be able to offer private medical coverage as a benefit, an increasing number of employers are recognising how important it is to support mental health issues. It is therefore not uncommon for employers to allow staff to attend psychotherapy during working hours (with time made up on another day) or to come to a flexible arrangement with staff, such as working from home, to enable them to attend sessions.

This blog is meant as a guide only.  For specific tax advise please refer to a tax expert or accountant.

All the content on this page has been reviewed and vetted by Mark Vahrmeyer UKCP Registered Psychotherapist, Supervisor and Co-Founder of Brighton and Hove Psychotherapy. For any questions or more information about the subjects discussed on this page please contact us.