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pre trading expenditure

pre trading expenditure

have a client who has lots of stuff they have bought over years - heard that it can go back 7 years if it would be business related and claimable otherwise. Is it true and can someone point me to a ref material?

many thanks


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29th Sep 2011 10:31


I would have thought that they can claim the purchase price if they bought it with the intention of starting the business. If they bought something and then decided to use it in their business they would have to use current value.

I am just using a common sense approach. I don't think HMRC have any set rules.

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29th Sep 2011 11:10

7 years rings a bell with me too.  Just about to go into a meeting so can't dig up the reference yet but I'm sure googling  "pre-trading expenditure" together with "seven years" will throw up something.


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29th Sep 2011 11:23

Yes but ...

what lasts seven years and as Ken says, it still has to pass the wholly and exclusively test. It has always struck me as a meaningless rule for 99.9% of clients who don't plan six months ahead let alone 7 years!

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29th Sep 2011 13:09

thanks everybody

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