Are business costs prior to setup of company OK?

Ciwan

Hello Friends

I have between 5 and 10 business expenditures relating to my small limited company that took place before my company was event setup at Companies House.

They took place about 3 to 4 months before the Company was officially created.

When I do my accounts, can I put down those down as costs too? Or would the HMRC say, these have come before the company was even setup, so you can't put those down!

Any advise would be greatly appreciated.

Thank You

Pennywise

Protocol is that if you've bought goods or services specifically for the proposed new business venture before it was officially set up, then you enter those costs dated as the first day of operation of the business. So, yes, include them in your first year's accounts.

If, however, you bought goods or services prior to the business, and used them for other purposes (i.e. private use or for another business), then you can only bring them in a market value rather than cost, to account for the usage/depreciation whilst they were used other than for your new business.

antrobus

Ciwan wrote: »

...When I do my accounts, can I put down those down as costs too? ...

Yes.

http://www.hmrc.gov.uk/manuals/bimmanual/bim46351.htm

Ciwan

Thanks guys, that is good to know.