From understanding expenses to starting a limited company, our downloadable business guides can help you.
It’s entirely possibly, and completely expected that – should you decide to go the limited company route when setting up your business – you may have incurred business costs prior to forming your limited company. The question is, can you claim those expenses even though your company didn’t technically exist when you paid for them?
Luckily, the answer is that yes, you can! As set out in Section 61 of the Corporation Tax Act 2009, as long as the claims are legitimate of course, “the expenses are treated as though they were incurred on the start date (and therefore a deduction is allowed on them).”
So, this means if you bought anything solely for use for the company you’ve now set up, you essentially consider the costs as occurring on the day of incorporation and they are therefore liable for an expense claim. This can include things like:
Just remember that they have to have been solely for business and not personal use – you can see a full list of allowable expenses here. You’ll also need your receipts and proof of purchases as well, just like you would for any normal claims. Bear in mind that any training costs that take place prior to incorporation are not allowable.
There is one final bit of good news as well. You can claim on any expenses from up to seven years before you formed your company. This means you can claw back a lot of your costs, but of course, with no receipts this might be difficult if HMRC call you up on them. Make sure you keep every scrap of paper and get it filed when running a business, it’ll always come in handy!
You might avoid a fine if a close relative died shortly before the self assessment deadline, you've been seriously ill, or if you had major IT problems.