What sort of claim can be made for pre-trade expenses which were paid for out of personal funds?
First, consider this report on Pre-Trade Expenses, and then you should come back here and use this flowchart to help establish one of four possible answers which might apply.
There is a lot of white space on this page. It is here deliberately, in order to allow sufficient boundaries between different questions and answers.
Step 1
Establish the following dates:
Day one of your business.
Three years before day one.
Your effective date for VAT registration (if any).
Six months before the date of your VAT registration (if any).
Three years before the date of your VAT registration (if any).
Step 2
Right now, is this item being used exclusively or primarily for business?
Step 3
Was this item bought more than 3 years prior to day one of your business?
Step 4
Are we talking about goods?
Step 5
Is your business VAT registered?
Step 6
Are we talking about goods?
Step 7
Was this item bought within the 3 year period prior to your effective date of VAT registration?
Step 8
Do you have reasonable evidence of the cost and the VAT figure?
Step 9
Are we talking about services?
Step 10
Was this service bought within the 6 month period prior to your effective date of VAT registration?
Step 11
Are we talking about services?
End 1
This item cannot be claimed.
Stop
End 2
Claim it using the the “fair market value” rule. Use a non-VAT form.
Stop
End 3
Claim it in full. Use a VATable expense form.
Stop
End 4
Claim it in full. Use a non-VAT expense form.
Stop
.
.