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

I have just started a business and have registered for VAT – but I had to make several purchases before the business actually started, so am I allowed to claim these?

1st June 2019

Yes, as a start-up, you can providing the expenses 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.

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.

If you would like more information on this area and what expenses/VAT you may be able to claim please feel free to call us on 020 3196 4888 or use our online contact form.

By Samantha Skyring FCCA

Disclaimer: The information provided is based on current guidance (at date of publication) from HMRC and may be subject to change. Any advice shared here is intended to inform rather than advise. 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 information, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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