Start-up: when does it begin?

[deborah]

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At what precise moment can you start calling purchases business costs? The moment you’re ready to sell something? Or while you’re still doing R&D?

Deb

[Robert Gerrish]

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Hi Deborah

I would suggest you keep receipts from whenever you purchase something that is related to your intended business and then discuss with your accountant.

She/he will I am sure advise you regarding what is permissable.

Robert

[peppie]

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My thought,,, is that you are a business and costs are counted, effectively as soon as you make the decision to aim to start a business.

It doesn’t matter to my mind that you are not making a profit or even an income, it’s all in the mind set. An accountant may say otherwise, but their job is to preach caution. In years past I had run a small part time business that didn’t often show a profit on paper, but as far as I was concerned it was a business. Not a hobby! And so I claimed it as such.

[ray_223]

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peppie, post: 3779 wrote:

It doesn’t matter to my mind that you are not making a profit or even an income, it’s all in the mind set. An accountant may say otherwise, but their job is to preach caution.

It does matter if you make a profit.
There are rules in place to stop people running a business at a continual loss as a way to reduce other taxable income.
You can however roll over some losses into future years, but as Robert says, keep all your receipts and discuss with an accountant.

[Author]

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