Network Marketing & Direct Selling: Tax Relief Available on Business Development

As a network market distributor for any of the many companies such as Utility Warehouse, Arbonne. Forever Living, Amway etc you are a self employed entrepreneur!! Your goal is to establish a good business that provides a high monthly residual income to enable you to go out and do all the things you dream out from exotic holidays to charity work – in essence being your own boss and in control of your life.

When you set out on this journey the first few years can be difficult. You work hard and can occasionally feel like you’re not “getting anywhere”. You spend money on fuel, coffees, meeting costs and any products and equipment necessary to develop your business. In fact, for the first two to three years you might make a loss as you work to build your business.

So, would some extra money over the first couple of years help?

If you are employed and have pay as you earn tax deducted through this employment, the loss you incur in your network marketing business can be offset against this income which will result in a tax refund – giving you some extra cash.


As soon as you sign up as a network marketer you need to register with HMRC as self employed. Keep a record of your business development expenses, be it networking meeting tickets, buying coffee for a potential client, the fuel you use meeting potential clients what you spend and at the end of each tax year simply submit your Self Assessment return showing your employed income and your self employed income and asking for the loss generated by your self employment to be offset against your employed income. You will then receive a tax refund.

If you are not employed or do not pay tax you still need to keep records of income and expenditure as the loss incurred in the early years can be carried forward and then offset against your future profits. This again reduces your tax burden in the first year or two you start to make a profit. So keeping a records of what your income is and what you spend is essential. It doesn’t matter how you do this – it can be on a spread sheet, a simple bookkeeping program, a written record or simply a shoe box to keep your receipts in.

Now what expenses are tax deductible?

These are many and varied and some expenses are tax deductible for one business but not necessarily for another business. If you ask yourself the question “am I spending this money to enable me to drive my business forward” the chances are the expense is tax deductible. Some expenses are obvious such as mileage at a rate of 45p per business mile plus an extra 5p per person should you give somebody a lift to, say, a meeting. Others maybe slightly less obvious, if you need a hand get in touch with me for some friendly understandable advice.