Prior to officially registering your business with the revenue comissioners you may incurr expenditure. This expenditure may be allowable as a business expense subject to the following conidtions:
Section 82 TCA 1997 provides that certain pre-trading expenses of a trade or profession are allowable in calculating the trading income of that trade or profession once it commenced. The relief applies to trades or professions, whether incorporated or not, which commence on or after 22 January 1997.
Under Section 82, a deduction is available in respect of pre-trading expenses which:
• are incurred in the three years prior to commencement of the trade or profession, and
• apart from Section 82 would not be allowable, but would have been allowable if they had been incurred after the date of commencement of the trade or profession.
Accordingly, the provisions of Section 81 TCA 1997 apply for the purposes of calculating the deduction. For example, only pre-trading expenses which were wholly and exclusively laid out or expended for the purposes of the trade or profession are allowable.
No relief is allowable under any other provision in respect of a payment which qualifies for relief under Section 82.
Examples of pre-trading expenses are:
• Accountancy fees
• Advertising costs
• Costs of feasibility studies
• Costs of preparing business plans
• Rent paid for the premises from which the trade or profession operates.