Pre-trading expenses

[leibnizster]

Hi everyone and happy easter!

Sorry if this information is available somewhere, I couldn't find the exact information I needed. The basic question is: what kind of pre-trading expenses can I deduct for my limited company? I've just started contracting a week ago (software consultant) and I have some expenses that I'm curious whether I can deduct. In addition, would the VAT also be deductable for all of them? They are as follows:

- laptop (I do a lot of my work on it, but also personal stuff - it has a rather powerful GPU that wouldn't make a lot of sense for software). What price would I use as an expense? Would I deduct something like the initial price minus the GPU and adjusted with its (slight) depreciation - the laptop is about 6 months old. Do I also get the VAT deducted this way?
- books. I have a lot of programming books that I've used as a programmer and that I use now as a software consultant. Can I add them as expenses? What percentage of their value shoud I use? VAT obviously doesn't applu here
- KOBO e-reader on which I read technical books, it's about 2 months old. Same question.
- some e-books
- computer monitor

and some items that are not that obiously used for my business, but I use them while working
- headphones
- raspberrypi

All of these items have been bought from my personal account before I incorporated my company and have been bought from my personal account and I have receipts for all of them.

Thank you!

[Lance]

Anything you can justify as wholly and exclusively for business. If you have a doubt ten don't claim. All these items are in the grey area so it depends on you and your business.
Try asking your accountant.

[malvolio]

Two things to remember:

1. You and Your Company are entirely separate, legally and in every other way. Never confuse the two

2. YourCo is your business trading vehicle. If you pay (or preferably YourCo) pays for something that is entirely ("wholly and exclusively") for business use then it is deductible against CT. Any grey areas and anything that are for personal use are not: for example, you do not need headphones for your line if work, and a Pi is only a business expense if you do commercial development work for them.

In the same way that not everything is about IR35, not everything you pay for can be paid by YourCo, any more than you can ask your neighbour to pay for it...

[leibnizster]

This is what I found on Affordable Accountancy & Bookkeeping Services | CH Accountancy Dunmow

Pre trade expenses can also include items that you owned personally, that you now use in your business, for example your computer, printer etc.

This would definitely apply to some of those items. And I can safely say I will use them 100% for business purposes. If that is the case, can I deduct the full value of the item or how would the deducted sum be calculated?

[leibnizster]

Two things to remember:

1. You and Your Company are entirely separate, legally and in every other way. Never confuse the two

2. YourCo is your business trading vehicle. If you pay (or preferably YourCo) pays for something that is entirely ("wholly and exclusively") for business use then it is deductible against CT. Any grey areas and anything that are for personal use are not: for example, you do not need headphones for your line if work, and a Pi is only a business expense if you do commercial development work for them.

In the same way that not everything is about IR35, not everything you pay for can be paid by YourCo, any more than you can ask your neighbour to pay for it...

That's why I put the headphones and the pi separately - I figured they wouldn't apply.
I'm not confusing the two, the e-reader for instance would solely be used to read ebooks about subjects involved in current or future projects in which my company is involved. Same with the books. I figure these woud all fit in the pre-expense definition, my only question is what amount do I deduct if I account for depreciation.
And the same question about the laptop: say from now on it will be strictly used for company business, how much would I deduct from the CT? Is there a way to quuantify that?

[northernladuk]

You've got an accountant haven't you?

[malvolio]

OK, lump them all into the company at current market value, then depreciate over three years at 33% pa, and you might have saved YouCo around £500 in CT after four years. Whoo hoo...

And none of what you listed are startup expenses, to be honest: books, for example, you already own and presumably already use, so they aren't wholly and exclusively YourCo's expense items in this context. Laptops don't count anyway: HMRC allow a degree of personal use anyway.

You haven't even got going yet and you're looking at complex detail on accountancy practice. Perhaps there are more important things to focus on?