Best section of P&L for pre-trading expenses?

I'm amending my CT return, under which heading would pre-trading expenses go in?

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Hi, 

I'm amending my corporation tax return to reflect pre-trading expenses of 7 years. 

I've learned these can be offset against company profits for the year so intend to put them in profit and loss account. Which though would be the best accepted section to put them under, would 'other charges' be okay to use in this instance? 

I don't believe I have to itemise all pre-trading expenses, just retain own company records for them. 

Many thanks

Replies (17)

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By David Ex
28th Mar 2024 15:01

In October 2017, a wise man responded to your first question saying “Find an accountant. You're out of your depth.” I had sympathy with that view then and I still do.

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Replying to David Ex:
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By lionofludesch
29th Mar 2024 10:16

David Ex wrote:

In October 2017, a wise man responded to your first question saying “Find an accountant. You're out of your depth.” I had sympathy with that view then and I still do.

Sounds like me.

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Replying to lionofludesch:
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By lionofludesch
29th Mar 2024 10:19

It was me!!

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By Paul Crowley
28th Mar 2024 15:02

You are submitting your own Corporation tax return?
Good luck.
The accounts should agree with the return.
So you should be showing the figures on the profit and loss. If I was doing this for a client, the accounts expenses would would be itemised as part of the accounts preparation.

Where did you learn about the seven year expenses thing?

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Replying to Paul Crowley:
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By CW15
28th Mar 2024 15:21

Yeah I'm submitting my own company corporation tax return, I'll put the figure under 'other charges' as seems best option to keep those expenses separate. I've got the records of all the expenses which helped me to calculate it.

Thank you

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Replying to CW15:
DougScott
By Dougscott
28th Mar 2024 15:35

Good luck.

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By Bobbo
28th Mar 2024 15:43

For the avoidance of any doubt, when you say "pre-trading expenses", are these expenses also pre the company's incorporation?

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Replying to Bobbo:
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By CW15
28th Mar 2024 16:11

Hi, they don't go back as far as pre incorporation, the company didn't actually start 'trading' until much later, so goes back 7 years pre-trading date.

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Stepurhan
By stepurhan
28th Mar 2024 16:32

Claiming 7 years of expenses is possible, but unusual. I'd definitely be subjecting those claims to detailed scrutiny before putting them in accounts.

Putting a large amount of expenses in as other charges is asking to be flagged for investigation.

Just two obvious issues from your brief query. Imagine how many other issues you could have without knowing it because you haven't hired professional help on this matter.

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By AlgernonB
28th Mar 2024 16:32

Avoid describing anything as 'other expenses', it's an open invitation to an HMRC enquiry. Give it its proper designation. If it's advertising to attract business, then it's advertising, for instance.

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Replying to AlgernonB:
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By CW15
28th Mar 2024 17:06

Thanks I appreciate the advice, I'll categorise them further into the P&L sections.

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By lionofludesch
28th Mar 2024 17:13

[sigh]

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Replying to lionofludesch:
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By FactChecker
28th Mar 2024 19:02

I fear you need a new [sigh] ...
... I barely felt the distress there that must surely have been experienced.

[I intend to recharge mine - not necessarily in this arena - over Easter]

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By spilly
28th Mar 2024 23:45

Maybe a [double sigh] is called for?

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Replying to spilly:
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By lionofludesch
29th Mar 2024 10:23

spilly wrote:

Maybe a [double sigh] is called for?

I sigh because this fella has been on here for years and seemingly has taken none of the advice offered - mainly to get an accountant.

I sigh because he's DIY submitted a return and now seeks to "correct" it with spurious claims.

I sigh because he doesn't seem to grasp the difference between a payment made by the company and an expense of the trade.

I sigh because HMRC oversight is so poor that he'll more than likely get away with it.

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Replying to lionofludesch:
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By DKB-Sheffield
29th Mar 2024 10:38

There's no double thanks button so...

[double thanks]

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