Are company set up fees tax deductible?

[tonibat]

many thanks for all the replies.

[sage@reillymcmordie]

Are company set up fees tax deductible?

You can reimburse yourself from the company, but the company cannot have a deduction for corporation tax. Set up fees are classed as a capital expense

[TCL]

When you set up a new company, the company doesnt have any money to pay its set up fees. Therefore you have to pay it. Once you have paid it though, you can claim it as an expense from the company when it does have some money.

Technically true, however first thing you should be doing is writing a personal cheque to your ltdco for your shares. Goes down in the books as "Share Capital" and then you can pay your setup expenses out of that.

Or as you say, just defer your expenses until you get your first invoice paid.

[Little'Old Me]

I think what we are all saying is -

This is one expense you can claim from the company and you know it will not be treated as a Benefit In Kind.

The company can reimburse you in full and it only pays the CT on the amount.

[EchoSierra]

I've claimed it since I consider it "wholly, exclusively and necessarily in the performance of the duties of the employment" since the agency won't pay into my personal bank account but only my company bank account.

[BolshieBastard]

When you set up a new company, the company doesnt have any money to pay its set up fees. Therefore you have to pay it. Once you have paid it though, you can claim it as an expense from the company when it does have some money.

Not certain whether this is classed as 'tax deductable' but you can certainly claim it back from the co.

I've done it every time I've set up a company via my accountants.

[BrilloPad]

Put it down anyway. I have done it 3 times now with no problem.

[Little'Old Me]

I did, and my accountant didn't question it.

But don't take my word for it as I have no clue what I'm doing. My moto is try it, if no one questions it then it must be OK

Your accountant would have included it in the accounts, I would too, as I would also include Entertainment costs, and depreciation too, for example. But your accountant (as all accountants will do), then does Tax computations where these expenses are added back (as they are not allowable for Corporation Tax purposes) to increase the profit, and either Capital Allowances, or the new AIA will be deducted etc.... to work out the final profit for Corporation Tax purposes. This amount is what the company will pay Corporation tax on, not the actual net profit in the accounts.

Depending on whats in the accounts, also depends on how complicated the tax computations can be.

When I look at a listed (on the stock market) company, I look at the amount of CT the company pays, not the amount of net profit in their accounts. Thats because the net profit has nothing to do with the taxable profit! (I see companies declare large profits, but pay no tax. To me that means they didn't really make a profit, they just made to company look like they did by some creative accounting - Ltd companies prefer to do their accounts to minimise the net profit, rather than to maximise them! )

[Bob Jones]

Unfortunately set up fees are not allowable - they are a one off capital expense but with self assessment and the relatively small amount HMRC will not open an enquiry for set up fees alone - but that does not make them allowable ..

Bob

[WetBehindTheEars]

I did, and my accountant didn't question it.

But don't take my word for it as I have no clue what I'm doing. My moto is try it, if no one questions it then it must be OK

[tonibat]

and can I just pay them out of the company as expenses?

thanks