I started my book-keeping business 6 months ago. Can I include pre trading expenses in my accounts.
Summer
Accountsguy said
Wed Mar 7 12:25 2007
Hi Summer,
You can claim for items going back up to seven years if they were made in respect of your self employment before you commenced trading. The expenses are treated as being incurred on the first day of trading, and can be treated as capital introduced. You need to be careful to distinguish between revenue and capital expenditure, as any capital items purchased will need to be expensed to the P&L over the appropriate number of years.
Guy
philippawatt said
Fri Jul 13 10:22 2007
Can I claim for what it cost me to complete my distance learning book-keeping course? I started it June 2006 and am paying for it DD so still have a couple of months on it. I got my VAT reg cert through yesterday and have been self-employed from May 1.
Philippa Watt
Man66 said
Fri Jul 13 10:59 2007
Hi Philippa
I had a chat to the revenue a few months ago regarding a client who took a plumbing course to start his own business. The course cost around £10K, and the client automatically assumed he would be able to reclaim this cost. Unfortunately because he trades as a sole-trader this isn't the case, and the expense should be treated as drawings.
I was told if he had been trading via a limited company and he was a director, he would be able to put the cost through as training if the course was in the companys name.
Therefore it does seem as though you can't reclaim the cost or the vat as it's a private expense. I would contact the revenue yourself though, as I've found no two calls to them ever get exactly the same answer!
Summer
You can claim for items going back up to seven years if they were made in respect of your self employment before you commenced trading. The expenses are treated as being incurred on the first day of trading, and can be treated as capital introduced. You need to be careful to distinguish between revenue and capital expenditure, as any capital items purchased will need to be expensed to the P&L over the appropriate number of years.
Guy
I had a chat to the revenue a few months ago regarding a client who took a plumbing course to start his own business. The course cost around £10K, and the client automatically assumed he would be able to reclaim this cost. Unfortunately because he trades as a sole-trader this isn't the case, and the expense should be treated as drawings.
I was told if he had been trading via a limited company and he was a director, he would be able to put the cost through as training if the course was in the companys name.
Therefore it does seem as though you can't reclaim the cost or the vat as it's a private expense. I would contact the revenue yourself though, as I've found no two calls to them ever get exactly the same answer!
Best of luck
Man