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Can I claim expenses from before I form a company?

In a nutshell, you can claim expenses from before you form a company.

Setting up a limited company isn’t something that many people take lightly.  In fact in most cases, there are certain costs just involved with setting up a limited company.  So before shelling out more costs, it’s entirely likely that you may have paid for various things while you contemplate the best structure for the business.

As long as the items are legitimate business transactions, then the “expenses are treated as though they have been incurred on the first day the company went live” according to s.61 of The Corporation Tax Act 2009.  In fact, you can claim expenditure from up to 7 years before you form the limited company.

As mentioned above, the costs must have been incurred “wholly & exclusively” in the course of setting up the business.  Such items you may have incurred could include the following:

 

  • Website design and developments costs.
  • Accountancy and legal costs.
  • Stationery, marketing or advertising costs.
  • Travel costs
  • Equipment such as computer or software.

Furthermore, if you also register for VAT at the standard rate, you may be able to claim back VAT on expenses claimed up to 4 years previously.

With anything, you must ensure that you have valid receipts before you can legitimately claim back any expenses.

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