Dormancy + Pre trading expense

Hi, Please could you clarify the technical dormancy status for corporation tax in regards to pre trading expenses. My example is the following. Accounting period - first period start 01/01/2022, first period end 31/12/2022 I did not begin trading in this period however I have incurred fees such as accountancy/legal costs for trademarks/copyrights and small fees for software set up. Therefore my income statement is showing a loss. I began trading in February 2023 - the second accounting period. Should I complete a ct600 form for YE2022 and add the loss from the expenses - carrying this loss forward or should I file a dormant ct600 and instead add in the expenses as a deduction against my trading profit for YE2023 on the following year's ct600? If I should be adding in expenses for YE2022 on that ct600 does this mean my company is not dormant? Will this impact my company's status for the associated company rules? Thank you

Hi tompalmer ,

If your comapny has not yet started trading, you can declare this period as dormant.
Any pre-trading expenses (expenses that are wholly and exclusively business related) can be claimed as "pre-trading" expenditure
in your accounts of the 1st period of trading.

Thank you.

Thank you for your response but this doesn't entirely clear up the question. You mention that 'pre-trading expenditure can be claimed in your accounts of the 1st period of trading'. In my example does this mean I will add these expenses as a deduction against profits of the first trading period (Accounting year 2)? Year 1 is dormant - no tax return is required. Financial statements report a loss in the income statement. Year 2 is trading - I reduce the taxable profits by the pre trading expenditure incurred in the period prior. Please confirm is this is correct?

Hi,
 

Yes, thats correct, the expenses can be claimed against the first 'trading' period . Thank you.