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Pre start up costs

I have recently set up my home-based business working as a Virtual Assistant.  I started the process in May and have so far spent nearly £1000 of my own money setting it up.  I have receipts and invoices for everything I spent so far.  I have now started trading and will be invoicing my client at the end of July and I have just opened my business account.  So all the costs I have incurred have been from my personal bank account.  I now have Sage Instant Accounts and I am in the process of setting this up.  However, I am a bit confused as to what I do with the costs I have so far incurred.  Do I enter these costs into Sage?  Can anyone advise me on this?

Many Thanks

Sharon
Virtual-Secs
www.virtual-secs.co.uk

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25th Jul 2010 08:22

Pre-trading expenditure

If the money spent was all for the business then it is pre-trading expenditure applicable to the business. You treat it all as incurred on the first day of trading and record it as such. If you're a sole trader then the other half of the entry is capital introduced. If you're operating through a company then the other half of the entry is directors loan account. Both of those entries credit you for paying personal money out on behalf of the business.

HMRC manual on pre-trading expenditure

On an unrelated note, are you sure about that business name? It sounds a bit unfortunate if you say it out loud.

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25th Jul 2010 08:27

Regret at leisure

"On an unrelated note, are you sure about that business name? It sounds a bit unfortunate if you say it out loud."

Maybe that's the idea.

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25th Jul 2010 09:54

Pre start up costs

Hi there, thank you for your response.

As for the business name...yes I am very sure of it.  It'ss a play on words and has had very positive feed back because of how it sounds.  Has caused many a person to giggle!  The idea came from the Secretarial Recruitment site called http://www.secsinthecity.co.uk/

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25th Jul 2010 09:56

Regret at leisure

Hi there, yes I am very sure of the name.  It's a play on words and has had very positive feed back because of how it sounds.  The idea came from a Secretarial Recruitment site called http://www.secsinthecity.co.uk/

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25th Jul 2010 17:09

Limiting your market

I thought it might have been intentional but I thought I'd ask circumspectly. Whilst you may have had positive feedback so far, I fear you will find that the name will be enough to put some people off using you. They will view the use of a risque joke in the business name as a sign of unprofessionalism. They may also fear that this penchant for being slightly risque will come through in work you perform on their behalf and that will affect their reputation.

It would almost certainly be unfair to make such judgements and have no reason to think you'd behave in anything but a professional manner at all times. However, that's the problem with first impressions, you only get one chance to make them.

This is just an observation that you may wish to consider. Presumably a lot of your pre-trading expenditure is branded so it's probably too late to change now anyway. I hope my concerns prove unfounded and wish you all the best in your new business.

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