Hi, finally I am taking the plunge and will launch my own business from July this year. My question is if I incur expenses in setting up the business like website, marketing material before July will I be able to claim the expenses in this financial year?
Congratulations on the big step!!
The expenses incurred this year MAY be deductible this year, however this depends on a whole raft of factors:
1: establishment costs. these are generally deducted over a 5 year period
2: operating costs would be deductible IN GENERAL, but again, it depends on a few things.
You need to take into account what the business structure is, and WHO is actually incurring the expense. for example, if you intend to trade using a company, and incur establishment fees, the tax deduction for this should be claimed by the individual who set up the company, because (logically) a company cannot incur expenses until it exists: it cannot exist until someone pays for this to take place.
There is also a set of rules around non-commercial business losses that you also need to take into account, which may or may not affect you.
the best thing you can do now, is talk to a good bean counter about your business, so you can cover off all these issues, as well as a heap of other things that will impact you and your business.
find yourself a CPA or CA with expertise in setting up and advising new small businesses, and have a chat with them, it will most likely pay for itself several times over.
Graham Doessel - CEO - MyCRA (Specialist Credit Repair) Lawyers (LPH)
Current Rating: 4.65 / 5
I agree with everything Brendan said, and also make sure you have specific commercial legal advice.
Also ask your 'bean counter' for tax planning advice - work out what you're going to do in advance so you're prepared.
Good luck Penny, and Welcome to the challenging and very rewarding world of small business :-)