Corporation Tax Act 2009 section 1216BE

Pre-trading expenditure

Section 1216BE explains how development expenditure incurred before a separate programme trade begins is treated for tax purposes, allowing it to be brought into the new trade.

• Development costs spent on a programme before the separate programme trade formally starts can be treated as part of that trade
• Such pre-trading expenditure is deemed to have been incurred immediately after the company begins carrying on the separate programme trade
• If the company has already claimed or used this expenditure elsewhere in a tax return, it must amend that return to remove the duplication
• Any necessary amendments to earlier returns may be made even if the normal time limits for amending returns have passed