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Posted Thu, 18 Apr 2024 13:20:24 GMT by Rustie04
Hi, I have no trading income but expenses such as Software package costs, advertising and legal fees. Would I be classed as dormant or do i complete tax returns as normal but with no trading income. If I am dormant, can I claim these costs when i have trading income?
Posted Wed, 24 Apr 2024 06:20:34 GMT by HMRC Admin 25
Hi Rustie04,
Please refer to:
BIM90080 - Post-cessation receipts and expenses: meaning of post-cessation expenses
Thank you. 

Posted Wed, 24 Apr 2024 13:34:34 GMT by Rustie04
Thank you but I have not stopped my business or intend to. I am ltd company, i have paid for expenses and have some Current assets, but no trading income. Products are in WIP as still not developed enough to sell or advertise. I am unsure if the Company would be classed by HMRC as dormant or active. Sorry if i did not make this clear, so wanted to check if I would be classed as dormant or active for Corporation Tax,
Posted Mon, 29 Apr 2024 14:53:20 GMT by HMRC Admin 17

If you are incurring expenses, then you could still be considered active for corporation tax purposes and will need to file a return.
Any business expenses that are allowable in the Business Income manual.

Expenses can only be deducted if they were wholly and solely for the purposes of trade,
please see BIM37007 - Wholly and exclusively: overview for more information.

I cannot give definitive answer on whether the expense is allowable or not as we do not give tax planning advise,
you may need to speak to a financial/tax advisor.

Thank you .

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