pre-incorporation expenses

[martinto]

Hi,

I have been working on a software product for a bit more than a year. Initially, I registered as sole-trader, but recently I registered a ltd company and I'll start trading under this company name. Now I have to file my tax return for the period I've been sole-trader, even if I didn't trade. During this period as sole-trader I incurred some expenses while developing this software product. Can I claim these expenses as pre-incorporation expenses? If I claim them in my tax return as sole-trader expenses they'll be a waste as I didn't make any income as sole-trader.

Cheers

 

[Scalloway]

I would just put zeros on the self employed tax return and explain in the white box that the business has been transferred to the limited company. You can claim the pre trading expenses on your limited company corporation tax return.

 

[DJR51]

If the company is VAT registered, or you're planning for it to become VAT registered, then you should also be able to reclaim the VAT on pre-incorp expenses, provided the invoices are in your name and you are now a director of the Ltd co - subject to the usual time limits of course.

 

[martinto]

That's great news! thanks very much for your advice!