Probably an easy answer
I have a new client who is a consultant working through his own Ltd Company. The company was incorporated in February 2011.
In the process of preparing his first set of accounts for the year ended 29 February 2012.
He has asked to put through pre incorporation expenses totalling £10k which date back to July 2010 so we are talking 7 months before incorporation. I have asked the client to confirm that they were all necessary in forming his Ltd Company and he has said the following which has got me worried:
"All of these above costs were prior to incorporation, but so was the bulk of the work that generated income. I would estimate perhaps 75% was done prior to incorporation and then billed immediately after incorporation."
My question is simple - can he put this income and expenses from before he incorporated through his Ltd Company like this or should it be reported as Self Employed income (he was not registered as self-employed) or even employed income.
To the best of my knowledge there were no contracts in place for the work carried out and if there were then they could not have been between the end client and his Ltd Company as it would not have existed.
Any help and advise (more than "walk away" from the client - which I am contemplating) would really be appreciated.
- Are there Special Rules for Agencies? 319 5
- Funding Circle Servicing Fee 117 2
- SA online - 4 hour limit 1,247 12
- Alerting clients versus walking away from clients 382 5
- Surprise visit from HMRC! 2,449 18
- Vat 239 4
- CT/CIS offset 102 2
- Statutory accounts, current company address, or one that was correct at EOY? 154 4
- Trade name 157 3
- Musician - Allowable Travel expenses 127 1
- New business - journal entries 302 20
- B2B vat in the EU 102 2
- Stamp duty on multiple property transaction 307 18
- Why should I retain membership? 2,652 45
- VAT on deposits 201 2
- VAT clearance for determining the correct rate to apply 123 1
- Annual tax investigation cover fee? 399 12
- option to tax 202 1
- Share of profits from building society 95 1
- sage vat journal 86 1
- Auto enrolment excuses 775
- Feedback on accounts production software for IFRS 704
- Add T&Cs to Sales Order in Sage 382
- Social investment tax relief 201
- Digita Hosted Software 196
- Call Centre Data Costs 190
- Buying goods in US and selling them to company in US 154
- Travel costs and contractors 148
- Problems with Sage 50 Payroll v21(2015) 139
- Certificates of tax deposit 133