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.
- Need qualification back due to clients' banks needing my references 604 12
- What does it mean?? 243 7
- Notes to statutory accounts 243 13
- Auto enrolment 972 11
- Money transfers between companies owned by one person 115 4
- Company overdue but wants to be struck off 299 7
- Two clients (married to each other) disappeared from client list 274 7
- A change from the old Q v NQ debate 212 7
- another ir35!!!! 1,006 6
- Gifting shares 244 5
- Tax Credit Overpayment 228 8
- A question about share structure 189 3
- Holding companies 136 5
- Offsetting CIS tax suffered against CT 98 2
- I'm not sure if this is the correct forum but here goes 530 6
- Soil Survey Required Mortgage 204 6
- PayPal Transaction Analysis 101 2
- Donations/grants by a CIC 171 1
- VAT Registration 400 18
- Is our client doing anything wrong? 680 5
- Skandia using wrong address 1,527
- Nil Rate Band Trust - index linked debt by way of charge over property 839
- International interest certificate 457
- NOVA 315
- Can Limited Company Buy Share of Rental Property? 205
- Subby expenses subject to tax & NI? 204
- Bonus Bonds 199
- Management expenses for investment company 192
- DOUBLE TAXATION RELIEF BETWEEN A PRIVATE LTD COMPANY AND GREECE (the private Ltd has no employees and its main activity is 180
- Have we escaped Gift with Reservation of Benfit & Pre-owned asset charges? - Gift after benefit 168