Is it true that you can count the 3 months prior to your company registration as trading or pre-treading? | LawHive - Solicitors & Lawyers Online
Is it true that you can count the 3 months prior to your company registration as trading or pre-treading?
I strongly remember some business person telling me that you can count the 3 months prior to your company registration, as trading or pre-treading. Well I kind of took them at there word, and put off registering my UK Limited company whilst I was waiting fo the name I wanted to become available. But now I'm now filling out my company accounts, and I can't seem to find this 3 months rule anywhere. Am I mistaken? Edit: i wish I could hire an accountant but funds are a little low right now so I'm having todo my books myself

James Mcintyre

20th October 2021

1 upvote

Top Answer
You get a 3 month leeway from beginning trading before you have to tell HMRC to register for corporation tax. Are you 100% sure that this is not what the 'business person' told you?

Margaret Becker

11th February 2022

1 upvote

Some pre-incorporation expenditure can be allowable expenses against Corporation Tax: s.61 CTA 2009 provides it is all incurred on the first day. That is actually 7 years. https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim46351 However what needs to happen is that there is a reimbursement after incorporation - and that reimbursement is allowable - since technically the company didn’t incur that expense before it existed. But it can be done before the company starts trading.

Patricia Garcia

11th February 2022

1 upvote

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