Self Assessment pre trading expenses

How many years of expenses can you bring in as part of the pre trading element

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Hi all,

Hope you guys are enjoying the sunshine from the windows (or maybe some are actually outside and getting to really enjoyt it)

I have a new client; sole trader who is a professional pharmacist. In their previous roles they have been paying for their membership fees, indemnity, equipment and additional training + milage to those training all from their own pocket.

I wanted to know of these which ones can be claimed for historical periods and for how many years?

Reason for this is I read that memebership is four years but I also read that you can do seven years, hence to confusion, 

Thanks in advance

Replies (22)

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By Tax Dragon
14th Jun 2022 17:28

It's a fair bet that some or all of those costs were wholly or mainly related to your new client's previous roles. If a cost related wholly or mainly to something else, it's a mathematical impossibility that it relates wholly or mainly to your new client's new(?) sole trade.

I just throw that out there, in case it's relevant to the pre-trading expenditure rules (in case you were thinking of looking those up).

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By CJaneH
14th Jun 2022 17:47

Agree with Tax Dragon, nothing to do pre-trading expenses. Claims can be made for expenses such as subscriptions against his PAYE income, can only go back 4 years.

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Replying to CJaneH:
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By insolventnl
15th Jun 2022 12:57

So subscriptions I can go back 4 years

Any equipment purchased , 7 years

Am guessing additional training to enhance skills + mileage to those training all from their own pocket are not allowable as one its a grey area and second is it wholly or mainly to do with the new trade? No, it is also to do with the new trade but not wholly.

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Replying to insolventnl:
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By Hugo Fair
15th Jun 2022 13:27

Leaving aside that guessing isn't a good place to start, I fear you are demonstrating 'selective listening' at its finest.
Go back to the first reply on this thread - and then follow TD's suggestion re the pre-trading expenditure rules.

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Replying to insolventnl:
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By lionofludesch
15th Jun 2022 13:34

insolventnl wrote:

So subscriptions I can go back 4 years

I would say definitely no to that.

How is my 2018 subscription relevant to a business I start in 2022?

It's not a business expense. Full stop.

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By Paul Crowley
14th Jun 2022 20:36

Claim what can be claimed against prior roles
Rethink training as that is such a grey area. Maintaining current skills is different to obtaining new ones.

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By Hometing
15th Jun 2022 08:59

4 years is for general repayment claims.

7 years is the pre-trade expenditure window, where allowable. Where claimed, they are treated as incurred on day one of operating.

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By sanone
15th Jun 2022 09:22

Wholly, Exclusive, Necessarily Incurred in Pursuance of the business.
Five simple tests when applied should give the answer.

From the OP, I would suggest that only any equipment that is since owned and used in the ST business would be possibly allowable.

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Replying to sanone:
By JCresswellTax
15th Jun 2022 10:04

Well that is just wrong. Necessarily isn't relevant for self-employed expenditure.

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Replying to JCresswellTax:
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By Paul Crowley
15th Jun 2022 12:56

Agree
Necessarily is for employees claiming tax relief for expenses
Tough nut to crack

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By lionofludesch
15th Jun 2022 10:02

Go far enough back and it's increasingly likely that the expense is not a trade expense.

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By User deleted
16th Feb 2024 14:44

I would like some advice please regarding self assessment pre-trading expenses please.

It was my wife's intention to start a another business, (I do the bookeeping/accounts for her), under her existing sole trader UTR, but then the Covid pandemic hit, and our world caved in, with my wife contracting Covid-19 pneumonia, (whilst working as a health care assistant, and spending 10 days in intensive care, fighting for her life, and then had a sustantial period of rehab with 'long Covid'.
We had incurred pre-trade expenses, but these expenses were obviously "moth balled".
My wife would like to, (health permitting), start this business in this tax year, (2023/24),and has even recently incurred further pre trade expenses.
My questions are:
1) How far back can we claim the pre trade expenses - (I believe it's 7 years?).
2) If the business commences in what's left of 2023/24, can the expenses be claimed before Jan 2025?
3) Rather bespoke question, for obvious reasons, in the event that my wife's health does not permit her from fulfilling this new business role, can she still claim for the pre trade expenses, and would she need to shut down the business?

Thank you

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Replying to User deleted:
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By FactChecker
16th Feb 2024 15:41

What leads you to think that "pre trade expenses" can be claimed (whatever you think that means) for a business that hasn't started operations?

Anyway, this site is not available to provide detailed bespoke advice to taxpayers (and members are aren't allowed so to do even if we felt like it), so you need to seek paid for professional advice rather than winging it on a public forum.
But if you really want to try again, I'd recommend submitting a brand new post - instead of adding stuff to an unrelated thread from the past.

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Replying to FactChecker:
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By User deleted
16th Feb 2024 17:31

New to the site, and was seeking help.
"Winging it"?!!!!
As I stated in my query, family have been through a lot, so don't appreciate the tone of your response!

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Replying to User deleted:
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By lionofludesch
16th Feb 2024 18:17

cookieboy wrote:

New to the site, and was seeking help.
"Winging it"?!!!!
As I stated in my query, family have been through a lot, so don't appreciate the tone of your response!

[sigh]

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Replying to User deleted:
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By lionofludesch
17th Feb 2024 12:06

cookieboy wrote:

New to the site, and was seeking help.
"Winging it"?!!!!
As I stated in my query, family have been through a lot, so don't appreciate the tone of your response!

Many of us went through a lot. Some of our relatives didn't survive. Some of us even went to funerals on Zoom. Few of us expected a tax break as consolation for our physical or mental suffering.

Your posts follow a pattern we've seen many times.

Poster asks question.
Poster doesn't get answer he wants.
Poster hurls abuse.
Poster flounces off.

It would be so much easier to tell you "yeah, of course this is an allowable expense". But how would that help your wife when HMRC ask for the money back - plus interest and a hefty penalty for misdeclaration?

Finally, another reminder that this forum is not here to give free tax advice to cost conscious business owners

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Replying to lionofludesch:
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By User deleted
17th Feb 2024 14:30

I did not post my query looking for sympathy, not at all, it was genuine query, but the reception I got from Factchecker, was deplorable, and so uncalled for, to be honest I was shocked.
I saw the thread, and thought it was on the same subject I was enquiring about.
To make the statement, "few of us expected a tax break as consolation for our physical or mental suffering", is quite frankly, shocking!!
The comments made by Factchecker, about "winging it" and "harsh but true", and my comments not "cutting ice, do you think they were acceptable?!!
No need for it.
Instead, why could he not say, "you're new to the site, and you should post a new thread", (like you did), but no, just a terrible attitude.
Writing about my family, was just giving a background to why our initial business plans were thwarted, in the context of maybe regrouping and starting again.
I wanted advice, and would have respected the advice I got, but NOT the caustic remarks I got from Factchecker!
Not acceptable, all day long, and the remarks angered me and my wife, hence the response!

Our story is not unique where the pandemic was concerned, not at all, and our hearts grieve for ALL the family's who lost loved ones, and my wife as a nurse caring for Covid patients, became a proxy member of family for many people who could not have their loved ones in their final hours.
Surprised I am even still getting responses, because I have put in an account closure request, not "flouncing off", just learnt a valuable lesson.

Advice, - whether it's the response you desire or whether it's not, is absolutely fine, and acceptable, but the caustic, unnecessary, and upsetting remarks, NOT AT ALL.

I wish you well

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Replying to FactChecker:
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By FactChecker
16th Feb 2024 18:07

Sorry you "don't appreciate the tone of (my) response", but:

a) as I said, this site is not for free accountancy/tax advice ... look up the bits you seem to have ignored when you signed up, if you don't believe me; and
b) it's a hard fact of life that (whilst I or anyone might well feel sympathy for your "family having been through a lot"), that background cuts no ice in the world of legislation that drives and determines your business and taxation responsibilities.

So you have three potential ways forward (other than closing your eyes and hoping for the best) in no particular order ... appoint a professional and follow their advice, or approach CAB in case they can offer any (limited but free) advice, or look it all up on the Internet (actual legislation not just glib 'guides' and forums) and hope you understand it fully.

Harsh but the reality. Good luck, but your problems won't be solved here.

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Replying to User deleted:
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By lionofludesch
16th Feb 2024 15:49

You need your own thread. Only folk who elected to follow this thread will see your post. For everyone else, it'll be buried on page 200odd.

Seven years is very optimistic. See my post just above yours. Good luck with that one.

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Replying to User deleted:
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By Tax Dragon
16th Feb 2024 20:37

I agree you won't get bespoke advice in here. How could you from the little relevant you've said? But we can probably rule out some possibilities, and that might help.

Couple of questions if I may. Do you expect your wife's new business to turn a profit? When?

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Replying to Tax Dragon:
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By User deleted
16th Feb 2024 20:48

Thanks very much for your response and I appreciate it.

Unfortunately I am closing my "membership" to this platform.

I wish you well.

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By lionofludesch
16th Feb 2024 22:38

Another satisfied customer.

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