• Skip to primary navigation
  • Skip to main content
  • Skip to footer

Top notice bar

Call us on 08000 388799

Avanti Tax Accountants HomepageAvanti Tax Accountants

Bookkeeping, Accountancy and Taxation services

  • Home
  • About Us
  • Our Services
    • Bookkeeping & Accountancy
    • Corporation & Personal Tax
    • Payroll & CIS
    • Company Secretarial Bureau
    • Budgeting, Forecasting & Business Valuations
    • Mentoring & Business Coaching
    • Software & Training
  • Our Accountants
  • News & Insights
  • Send An Enquiry
Home » News & Insights » Do You Know Your Trading From Your Non-Trading Companies?

Do You Know Your Trading From Your Non-Trading Companies?

Posted on 12th April 2021

A common misconception we encounter is whether a company is defined as trading or non-trading in the eyes of HMRC.

A company is considered by HMRC not to be active when the company has not yet become active or started trading. The company whilst not yet active for CT purposes can still carry out activities (known as ‘pre-trading activities’) or incur costs (known as ‘pre-trading expenditure’).

HMRC’s guidance states that activities or expenditure – to do with setting up a business – that are not considered trading by HMRC for CT purposes include:

  • preliminary activities such as writing a business plan or negotiating contracts;
  • preliminary expenditure such as incurring costs with a view to deciding whether to start a business.

When the company becomes active (usually after carrying on a business activity), HMRC must be notified. This needs to be done within 3 months of a company starting their tax accounting period. The best way to notify HMRC is using the online registration service.

When a company has previously traded and then stops it would normally be considered dormant. A company can stay dormant indefinitely, however, there are costs associated with doing this and certain filings must still be made to Companies House.

This might usually be done if for example a company is restructuring its operations or want to keep hold of a company name, brand, or trademark. The costs of restarting a dormant company are typically less than starting from scratch.

Source Informanagement

Share this post:

Share on TwitterShare on FacebookShare on LinkedInShare on E-mail

Filed Under: News

Disclaimer:- The information contained herein is given by way of general guidance only and no action should be taken solely on the basis of the information contained herein. The Avanti Group (UK) Ltd will be pleased to provide further guidance on the issues, and how they might affect you. No liability is accepted by the firm for any action taken without seeking appropriate professional advice

Footer

Navigate

  • Find An Accountant
  • About Us
  • News & Insights
  • Privacy Policy
  • Letter Of Engagement

Our Services

  • Software & Training
  • Mentoring & Business Coaching
  • Budgeting, Forecasting & Business Valuations
  • Company Secretarial Bureau
  • Payroll & CIS
  • Corporation & Personal Tax
  • Bookkeeping & Accountancy

Get In Touch

Tel: 08000 388799
Send us an enquiry

  • Facebook
  • Instagram
  • Twitter
Copyright © 2023 Avanti Tax Accountants · All Rights Reserved
Part of The Maurice J Bushell & Co Ltd Franchise (UK) Ltd · Company Reg: 10407313 and The Avanti Group (UK) Ltd · Company Reg: 04635630 · Created by Purple Hippo
  • So we can contact you to discuss your enquiry
  • So a member of our team from your area can contact you
  • By clicking ‘Send Enquiry’ you agree to receive contact from Avanti Tax Accountants using the details given above. We respect your personal information and your privacy and will not share or sell your information to other organisations. Please read our Privacy Policy for more information.
  • This field is for validation purposes and should be left unchanged.