Provided that the loan was taken out for qualifying expenditure then it is an allowable expense.
for information, qualifying revenue and Capital expenditure is allowable during the seven years prior to commencement of trade. Services are allowable for six months prior to start of trade.
Everything is taken as though the company performed the transaction on its first day of trade.
BUT... (big but there)
AIA and FYA's relate to the date of actual acquisition so where pre trading expenditure is brought into the business Annual Investment and First Year allowances will not be available to you.
Hope that helps,
kind regards,
Shaun.
p.s. amended because I missed the words "and Capital" out.
-- Edited by Shamus on Sunday 11th of November 2012 11:01:01 PM
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I've just started doing the books for a new client and there is a lot of pre-trading expenses up to two years prior to the business starting up.
I've got the receipts to confirm they are business expenses, some stock purchases, flyers and posters etc.
There is a loan that was signed for 18 months prior to the official start of the business. Customer advised the money was used on pre -trading expenses. Can I claim the interest on the loan and if so would I just put through the full amount on the first day of trading as the loan was paid off before the buisness started.
