Income Tax (Trading and Other Income) Act 2005 section 57

Pre-trading expenses

Section 57 provides tax relief for certain expenses incurred before a trade actually begins, by treating them as if they were incurred on the first day of trading.

• Expenses incurred up to 7 years before the trade starts can qualify for relief under this section
• The expenses must be of a type that would have been deductible had they been incurred on the date the trade commenced
• Qualifying expenses are treated as though they were incurred on the start date, allowing them to be deducted when calculating trading profits
• This relief replaced an earlier approach which created a trading loss in the year the pre-trading expense was actually incurred