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Trading before registering a limited company

Trading done before registering as a limited company, how should it be handled?

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*** Background ***

At the beginning of 2019/2020 tax year I was unemployed after leaving my only job which was salaried employment, that I had a few months before.

In mid April 2019, I started buying and reselling a few items (mainly buying through eBay and selling on Facebook Marketplace). Purchasing a total of £1,200 of goods and making sales of £700 (still having some stock left).

After this I registered as LTD company end of June 2019 (of which I would be the one and only director)

To date overall I have total purchases of  £4,000 and total sales of £6,000. So a total profit of £2,000 as I have yet to draw a salary.

*** Questions ***

Having bought and sold items before registering the limited company, can all the purchases and sales before the company registration date be included with my first company tax return or would they be out of the scope of the limited company?

If out of the scope of the limited company, would I have been unknowingly been classed as a sole trader for the period of end of April 2019 to the last date (October 2019) any stock that was bought between mid of April 2019 and end of June 2019 was sold?

Any help would be greatly appreciated.

Thank you.

Replies (2)

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By lionofludesch
27th Mar 2020 12:58

You were self employed until at least the date the company was formed.

After that, you may well be trading through the company - or maybe not. Depends on the evidence. Who issued the sales invoices ? To whom were the purchase and expense invoices addressed ?

You need to visit an accountant. If you'd done this before you started trading, you wouldn't be in such a mess now. A company could've been formed for you within 24 hours.

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By ireallyshouldknowthisbut
27th Mar 2020 14:20

For the sums of cash involved, this form is your friend.

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