I've started a business, can I offset costs incurred before it started?

Yes, as a start-up, you can claim relief for pre-trading expenses providing they were made for business purposes. These expenses will be treated as though they were incurred on the first day of trade and tax relief will be given where appropriate – corporation tax relief if the business is a limited company or income tax relief if you are a sole trader. 

VAT can also be reclaimed on these business expenses made prior to the date of VAT registration – the rules for this are different for goods and services. 

You can go back up to four years from the date of registration for VAT on goods you still have ‘on hand' or that have been used to make other goods you still have. 

It's six months for services. 

 

Last updated 3 Jul 2026 | First published 31 May 2019

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This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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