Hi,
I set up a new limited company in May 2020, however I bought a lot of items before I incorporated the company with Companies House.
How do I put these items that I bought into my accounts and how far back can I go ? I also put anything bought with personal money as paid by Director Loan Account, I guess this is correct, in that through the DLA the company owes me money that I can withdraw once I start to make a profit.
Last thing, bits bought from Facebook Marketplace/Gumtree dont come with reciepts, so how can I account fro these?
Thanks,
Nick…
Purchases made prior to a company being incorporated are not business expenses as such, because the business didn’t exist prior to the incorporation date.
If you wish to sell the items you bought to the company you can do so by raising purchases in your name and marking the payment as being from the DLA.
With regards to gumtree, Facebook etc. I’m pretty such whatever payment method you used (unless it was cash) supply an acknowledgement by email that payment was sent. You can create purchases yourself and tag the payments to them if you wish, but keep those acknowledgements as proof of purchase
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OK thanks.
So If I bought something the same year but before incorporation can I charge the full amount I paid for the item, and what about if the item was bought 12 months before incorporation ?
The items you bought before incorporation are treated as items you bought personally. You can sell them to the ltd company at market value if you wish, whether thats the same amount as you paid i have no idea. You’d need to work that out.
OK thanks,I will look at several monetary values on the web and take the average as the selling price.