Pre-trading expenses
I have various purchase invoices relating to pre-trading expenses. I commenced trade 1st December 09, and have chosen a year end of 31st March. I have registered for VAT. I am using Sage 50 Accounts for my records. Can anyone advise how I should account for these costs, and the procedure to ensure the VAT is included in my VAT return?
Pre-registration expenses
The good news is that VAT can be claimed on expenses incurred prior to registration. There are certain restrictions, but essentially, the expenses must be for the purpose of the business, and the cost borne by the business. Check out Notice 700, chapter 11 for fuller details.
These should be included in your first VAT Return. When you run the VAT Report in Sage, as long as the expenses are on the system, Sage should find them, and include them on the reports.