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Pre incorporation income

Pre incorporation income

A client, sole trader started consulting for a company in Jul 2011 and has received payments in nov 2011 and february 2012. The client now wants to setup a company and start invoicing. My question is can the two earlier payments be brought into the company as income/revenue and then a dividend be declared and paid by the 5 April 2012?

Any help is GREATLY appreciated, on a tight deadline!

Thanks.

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By occca
27th Mar 2012 07:08

Sole Trader

No this income will be treated as self employed income and will need to go on clients self assessment tax return

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By VP
27th Mar 2012 12:09

Should be a bit more clearer

Thanks for the answer occa.

 

Maybe i should re word. The client is not registered self employed. Basically he received to payments in Sept 2011 and Feb 2012 as payment of fees in advance, with the intention that a company would be set up and then the income would be trasnferred to the company and any futrue payments would be made to this new company. Basically he just took his time in setting the company up. It is all in the current tax year. Is there a good enough arguement to bring this income into the company?

 

Thanks

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By occca
27th Mar 2012 12:19

No

The company is a legal entity in it's own right and can't have income prior to it's incorporation as legally it didn't exist

He will have to declare the income as self employed

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