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?
I shall start this peace with a caveat – I am not an accountant and the information I am sharing has come from my own experience and that of patients I have treated who have been self-employed or run their own businesses in the UK.
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 that in some cases 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 patients 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 being 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:
Ellie, 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 as her symptoms relate directly to her work and are impeding her ability to earn a living.
The reasons for Sarah’s anxiety could be numerous such as for example, an unconscious fear of success rooted in her mother’s low opinion 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 patient brings, the underlying process will be addressing deeper relational issues.
It is not uncommon for patients 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 month after month. 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 one’s understanding of the self through the unique relationship with a psychotherapist, many patients continue to find that an ongoing process of psychotherapy becomes an asset in 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 could 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. Increasingly employers are both aware and invested in the mental health of their staff and editor have Employee Assistance Programmes in place, or are willing to contribute to the personal therapy or clinical supervision of their staff when required.
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 from work to attend psychotherapy
And lastly, where employers may not choose or be able to offer private medical coverage as a benefit, an ever 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. The stigma around mental health has not been eradicated, however, it has become easier in most organisations to raise mental health issues as a problem and to request support from your employer in accessing support.
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.
Thank you for this helpful article. So to clarify you would say you can claim personal therapy as a business expense? This is such a controversial topic, and many of my colleagues have been advised by their account’s and the HMRC that it is not a tax deductible expense, but a personal one.
I have just started private practice and I was more inclined to claim personal therapy as an expense, as it benefits my job.
Brighton and Hove Psychotherapy says
You would need to discuss the details with you accountant, however, if you are a clinician then in our experience, personal therapy is a totally legitimate business expense.
Michael Wilson says
Do your clients ask you to complete a 1099, as they would for another consultant working for them?
Brighton and Hove Psychotherapy says
I am sorry but we are unfamiliar with a ‘1099’. Could you elaborate? We are UK based – perhaps this is an American form?