Deductions for income tax and VAT?

Question

I am about to start some courses that will eventually lead to qualification to start my own business. Those courses are vatable, can I register a business now in view of claiming VAT later when I start trading? Or can I at least deduct the costs of those courses from any income later?

Answer 1

You can register now, in anticipation of trading but will only be able to recover VAT incurred up to six months before you start to trade.  

The position is similar with regard to income tax deductions - you will have to show that the expenses were necessary for you to start trading and incurred within six months

Answer 2

You need to estimate you turnover for the first year, i.e the net  value of your sales.

for 2007/8 the thresholds for registering and de-registering for vat were as follows:

Register if t/o > £64,000.00

Must de-register if turnover is less that £62,000.00

These have changed for 2008/9, you need to search the hmrc site and find this years figures.

You cannot charge vat without registration