No trading Income

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?

Hi Rustie04,
Please refer to:
BIM90080 - Post-cessation receipts and expenses: meaning of post-cessation expenses
Thank you. 

 

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,

Hi,
 

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 .