Pre trading expenditure

You don't mention when the accounting reference date is so we don't not know which period the statutory accounts you are asking about will cover.

But I will hazard a guess that it will be 30 April 2015, as that will have been the default accounting reference date set when the company was incorporated. So from what you say the company will clearly not be dormant in that period. It does not seem that is has been dormant since at least 1 January 2015.

You will recognise the transactions in the accounts as what they are - on first principles. If there is a loss for tax purposes I can's see any reason why it would not be carried forward against the first available taxable profit. 

Thank you for the clarification about the accounting reference date. Yes I understood what your question was and that is the question I answered.

Dormant (not)

The statutory accounts for the period ended 31 March 2015 are not 'dormant' accounts as the company was incurring expenditure.

Have you considered shortening the accounting period so that it ended on 31 December 2014 & filing dormant accounts for that period.

The next accounts would then be for 12 months to 31 December 2015.

RM

There will be a loss in that period to the extent of the revenue expenditure that is incurred. I am not sure why you keep coming back seeking answers to a question that has already been answered. However many times you ask it the answer will still be the same.

I have re-read your question each time you have asked it, and see that it is still the same as the one I answered a while ago. For the avoidance of doubt, my answer to your question is that "You will recognise the transactions in the accounts as what they are - on first principles" 

Revenue costs = prepayments

Pre-trading expenditure falls into two categories...

Capital expenditure (assets / equipment) - capitalise thisPrepaid expenditure before the trade starts (include under the heading Current Assets)

The prepaid expendture will then hit the P&L as a cost in the year that trading starts - costs matched to revenue - relevant costs in same year as relevant income.

Another view is that it is "wrong" to prepay the expenses and therefore you should create a loss before starting to trade by treating as costs in the period before trading.

I appreciate accountancy can be deemed an art and not a science but come on pre trade expenses treated as a prepayment !? can we just keep this simple please...

In a period ...no sales and allowable business revenue expenses incurred = LOSSES 

the accounts would not be dormant .

A wise old tutor once said ...the  dormant accounts ( a sleeping hibernating mouse ) neither feeds, hunts, or toilets, they merely sleep. If nothing happens except sleep then that is dormant...

Shopping is therefore not dormant.

pre trading expenditure

I think that maybe the mistake here is to keep talking about "pre trading" expenditure. In my book any revenue expenditire is trading expenditure even if you have't yet sold anything. You are incurring trading expenses without generating any income so you are making a trading loss which can be set against future profits for tax purposes. 

@ek339

You should take heed of the advice given by johngroganjga.  He is a knowledgeable person and he was not being patronising, just irritated at you asking the same question again, but re-phrasing it.  Andp and ann.greenwood have also both given the correct advice, which is the same as that given by johngroganjga.  

Problem

I think the problem is that the OP believed that if the company did not make any sales it was dormant. This is not the case because being dormant would require the company to make neither sales nor purchases.

Pre trading

I think also that where a sole trader commences then certain payments made before trading commenced (from personal funds) are brought into account on day one, Obviously a company cannot have "private funds" and so it all happens when the mouse stirs so to speak

Commencement of trading

So is the received wisdom that if a company first incurs, say, capital expenditure on, say, 8 January but does not make its first sale until, say, 20 February that the company commenced to trade on 8 January?

RM

This from HMRC is useful

Just found this that may help the debate a little:

https://www.gov.uk/corporation-tax-trading-and-non-trading

M

Link Fixed!!

Link failure

'Page Not Found'

possible cause of confusion

I think the problem may be that there is a confusion between the accounting treatment and the tax treatment of pre trading expenditure and between a trading company, an active company and a dormant company. 

From an accounting point of view all expenditure should be booked when it is incurred, and if you want to be uber pedantic, a deferred tax asset could be created  to recognise that the expenditure will be allowed.  From a tax point of view the expenditure incurred is treated as if it were incurred on the first day of trading.

A company can be active, without trading, so, runningmate, the answer to your question is "no", the company became active, so ceased to be dormant on 8th January, but did not start trading until 20th February.  Subject, of course, to some other activity prior to those dates advancing them.

Trading does not mean sales

A further consideration is that trading does not necessarily commence when the business makes its first sale. Trading actually commences when the business is in a position to make sales. That could be much earlier. If the product is bespoke, then a sale could even be agreed before the purchase of the materials to meet said sale.

An open shop is trading, even if no-one comes in to buy anything.