Costs 9 months before my business started.

[Deleted User]

Hi All

I need some advice. I have read here (a while back) that someone claimed costs for items purchased for business usage 9 months before they registered as self employed.

Ok so here is my situation, I purchased a car 9 months before I started a "partnership" business. The car is mainly used for the business (it tows the business around). So I want to claim this as "capital" "first year" expenses, and claim the whole amount (less non-business usage %)

Does this seem okay? As I have said people have done this and people have agreed on here before, hence why I got the idea!

Please be nice to me! Thank you.

Savvy_Sue

Have you got an accountant? I would ask for proper advice because the answer may be 'it depends'.

Micky_d

Hi, I spent 6 months gathering 'assets' for my new business while I was writing the business plan. I did some tax workshops with HMRC and they did state that I could claim the cost of the vehicle back if It was bought for the business.

You must remember, if you do this, the vehicle becomes an asset of the business and you then have to account for depreciation over a set period. If you sell the vehicle or any asset you have attached to your business then you have to account for the sale in your records.

Also, if you are also using the vehicle or any asset for personal use, you can only claim the costs as a % of the total. So if the total amount of time you use your vehicle is 70% for the business and 30% for personal use (when you are not at work), you can only claim allowances for the work use. This also goes for any repairs or expenditure and fuel on the vehicle or asset.

Hope this helps. By the way, if you have spent a significant amount on setting up the business and paid a lot of VAT, if you voluntarliy register for VAT you can claim the VAT back (4 years for assets) and 5 months for services. This may give you some working capital back from the VAT man, just remember, you will then have to submitt a VAT return every quarter or annually and will have to charge VAT on your goods or services. (Pros and cons I'm afraid)

[Deleted User]

Thanks both, this was as I thought, so maybe a good idea to look further at this then :-)