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.
- Sole Trader using Tax Losses 115 6
- White van man 314 15
- Window Comb Binder Cover 281 5
- STUDENT LOAN 41 1
- Bookkeeping question 558 6
- wave software 209 2
- Directors Pension Contribution 329 8
- Teacher doing marking - tax deducted 192 3
- Backdate C79? 155 2
- Entertaining - definition? 289 2
- Do you lose losses on cessation 345 10
- foreign income 106 1
- SA1 Online 85 1
- UK resident non domicile recieving a gift from his parents in Pakistan. 90 1
- Relevant earnings and losses 89 2
- Sole trade and vehicle leasing 342 9
- VAT recovery on company owned van used by employee with some personal use 96 1
- Capital allowances offset rule 133 1
- Non sterling partnership profits, exchange rates and tax 124 4
- Worried over stock value 156 1
- Form MR01 (Particulars of a charge) - does this need to be filed if you remortgage with the same lender? 820
- Copy Wanted 545
- Underpaid VAT assessment and relation to SATR 501
- Did you realise Google will not patch android exploit ... 485
- Latest phishing scam 338
- Entrepreneurs' relief 311
- Supply teachers and Ltd Companies 284
- Cashback for opening business bank acct = trading income? 277
- Corporate LLP with 30 June Year end - How to record on SA800? 273
- Auto Enrolment Questions Answered 180