Allowable expenses

Glittering_M

Hello,

I am looking to start my own business which I will run alongside my full time employment. I plan for this business to carry out 3 main activities. Before I can do one of the activities, I will need to some training and buy material which is necessary to do the activity (I am being vague I know, but it is quite a niche area). 

The next training is in March. I can buy this training combined with the material I need, which I think, is for a cheaper price than buying separate. I would need to  purchase the training before the course.

I won't be earning anything this financial year. Can I claim the combined kit as allowable expenses on any profit made in the 22/23 financial year even though it will be purchased this (21/22) financial year?

Kind regards,
G_M

Jeremy535897

See https://www.litrg.org.uk/tax-guides/self-employment/working-out-profits-losses-and-capital-allowances/can-i-claim-pre-trade

Glittering_M

Thank you! That is great. 

Taxguru222

It's important to make sure that any expenses actually relate to the business that you are running - i.e. you could have 3 separate businesses rather than just 1 business

Glittering_M

The business areas will all fall under one umbrella (people development) so I'm hoping it would be ok. The area I'm looking to purchase stuff for this financial year is what I'd be carrying out work in relation to initially. Definitely worth me considering though and reflecting on how they all fit in. Thank you.

Jeremy535897

The last thing you want is to volunteer the existence of multiple businesses when there is really only one. It does happen (for example farming and accountancy).

Glittering_M

Oh, no there is definitely only one, which relates to personal development. I'll just offer different things within, under that umbrella and they all definitely will fit. Thanks for your advice. I think my initial post was just poorly worded.

Pennywise

Regardless of the timing of the payment, the "training" element may not be allowable if it's a new skill you're learning. The general rule is that only the ongoing costs of keeping existing skills up to date is allowable, i.e. CPE etc., not the initial learning of your skills.

Glittering_M

Yes, that was clear on the Government website. It is the products that I need that I would be classing as allowable not the training. Thank you.