Claiming pre-trading expenses on your Corporation Tax return

Last updated: 12 October 2026

Short version. Qualifying pre-trading expenditure deducts qualifying costs from before trading began in the tax computation for the period trading started. It does not change your accounts and has no CT600 box of its own. Qualifying costs from before trading started can have a tax deduction. Where you enter them depends on whether they are already included in the accounts expenses. Check the situations below to avoid a duplicate deduction. You determine which costs qualify.

Go to the steps and entry details

On this page

Tax computation onlyPeriod trading startedAny period up to 18 monthsWhere you see it: Financial Data › Tax adjustments › Qualifying pre-trading expenditure

Before entering figures, the filing setup questions can set the existing destination and CT600 route for an ordinary limited company. They keep the full accounts dates beside the CT600 dates. You can also continue with the controls below without opening the questions.

What this field does

Qualifying pre-trading expenditure deducts qualifying costs from before trading began in the tax computation for the period trading started. It does not change your accounts and has no CT600 box of its own.

The deduction appears in your tax computation as its own line, "Less: Qualifying pre-trading expenditure (CTA 2009 s.61)", and the computation is filed to HMRC with your return. HMRC sees exactly what was claimed and under which rule.
There is no separate CT600 box for it. It reduces your trading profit, or deepens your trading loss, which is how the legislation applies it.
Your accounts do not change. Costs already inside this year's expense figures are deducted through those figures, so they do not go in this field. Which situation applies
The field sits under Tax adjustments, among the options shown by + Show all adjustment options. It is not offered for a return with no trade.
For a period that files as two CT600s, the whole amount goes to the return covering the day trading began. Long periods

Which situation applies to your accounts?

Where you record the costs depends on whether they are already included in the expense figures in your annual accounts. Use the option below that matches your accounts.

Your first accounts start before HMRC's later Corporation Tax start date and include these costs. Keep the costs in their normal expense lines for the full approved accounts. Do not enter them again in Qualifying pre-trading expenditure. Add any part that is not tax deductible to Disallowable expenses. See which accounts to attach to your first CT600.
The costs are inside this year's expense figures. This is common when your first accounting period runs from incorporation and trading started during it. The costs are already reducing your accounting profit, so the deduction is already happening. Do not enter them in the pre-trading field as well. If part of them does not qualify, put that part in Disallowable expenses so it is added back.
The costs were expensed in an earlier year's accounts, before the trade existed. For example the company was dormant for its first year, spent money getting ready, and those costs produced a small loss in that first year's accounts. There was no trade that year, so no tax deduction was possible then, and there is no trading loss to carry forward either. The deduction belongs in the year trading started. Enter the qualifying total in the Qualifying pre-trading expenditure field. Your accounts do not change, the earlier year stays as your comparative, and the deduction appears in the tax computation only.

Use it if all of these are true

The costs were expensed in an earlier year's accounts, before the trade existed, and are not in this year's expense figures.
This is the Corporation Tax period in which trading began.
You have decided which of the costs qualify under the conditions below.

Do not use it if

The costs are already inside this year’s expense figures.Leave them there and enter nothing in the field. See the common mistake
The costs are in this accounts period, before HMRC’s later Corporation Tax start date.Use instead: Which accounts go with your first CT600
The cost is equipment or another lasting asset.Use instead: Capital allowances: what to enter
The business is a property letting that never started.Use instead: Costs before the first letting

Common mistake: claiming the same cost twice

If the £2,400 of costs had been paid this year, they would already be inside the expenses that produce the £9,000 accounting profit. Entering them in Qualifying pre-trading expenditure as well deducts them twice.

Costs in this year’s expenses and also in the field (wrong)

Accounting profit, after the costs: £9,000
Qualifying pre-trading expenditure: £2,400
Taxable total profits: £6,600
Corporation Tax: £1,254

Costs in this year’s expenses only (right)

Accounting profit, after the costs: £9,000
Qualifying pre-trading expenditure: Nothing entered
Taxable total profits: £9,000
Corporation Tax: £1,710

The field is right only when the costs were expensed in an earlier year's accounts, as in the worked example below.

What counts as qualifying pre-trading expenditure

The rule comes from section 61 of the Corporation Tax Act 2009. A cost qualifies when all of these are true:

It was incurred within seven years before the day trading began. Older costs get no relief.
It was incurred wholly and exclusively for the trade. The same test that applies to any business expense.
It is a revenue cost, not a capital one. A running cost rather than the purchase of a lasting asset. Typical examples can include insurance, recurring software subscriptions, advertising, travel to meet suppliers and revenue professional fees that are not connected with forming the company or acquiring a capital asset.
It would have been deductible if the company had already been trading. A cost that would be disallowable anyway, such as client entertaining, does not become deductible by being paid early.
The company that incurred the cost is the company that started the trade. The relief does not transfer automatically from a director or another person to the company.

HMRC explains the scope at BIM46351 and the relief at BIM46355.

Was the cost incurred by the company?

Section 61 relief is only available to the person that incurred the expenditure and then started the trade. For a company filing a Corporation Tax return, this means the company must have incurred the cost and the same company must have started the trade.

The company incurred the cost after incorporation. It can potentially qualify if all the other conditions are met. Keep the invoice, receipt and evidence of the business purpose.
A director paid a company bill after incorporation. Check that the invoice or contract belongs to the company and that the payment is recorded correctly in the company's accounts, for example through the director's loan account. Paying personally does not by itself prove who incurred the cost.
The cost arose before the company was incorporated. Do not assume that reimbursing the director later makes it the company's pre-trading expenditure. The company did not exist when the cost arose. Ask an accountant before including it in this field if the position is not clear.

What does not qualify

Company formation costs. The Companies House incorporation fee and professional fees specifically for forming or registering the company are treated by HMRC as capital, so they are not deductible. HMRC explains this at BIM46435.
Equipment and other lasting assets. A laptop or machinery bought before trading is capital spending. Relief comes through capital allowances instead, which have their own rule treating pre-trading purchases as made on the first day of trading.
Original website creation and substantial software projects may be capital. Do not assume every website or software cost is a revenue expense. HMRC says routine website updates are likely to be revenue, while the original cost of creating a lasting website is likely to be capital. See BIM35815.
Loan interest and similar finance costs. These follow their own rules and are outside the pre-trading expenditure field.
Costs more than seven years before trading began.
Costs that would be disallowable anyway, such as client entertaining or fines.

A worked example

Hornbeam Example Ltd is incorporated in 2024 and is not yet trading. In its accounts year ended 31 March 2025 it spends £2,400 getting ready: £900 on pre-launch advertising, £600 on business insurance, £500 on recurring software subscriptions and £400 on travel to suppliers. It also paid a £150 Companies House incorporation fee. Its first accounts show a loss of £2,550, and no Corporation Tax deduction is possible because there is no trade yet.

Trading begins on 1 April 2025, the first day of the next accounts year, ended 31 March 2026, and the company makes an accounting profit of £9,000. Under Tax adjustments it enters 2400 in Qualifying pre-trading expenditure. The formation fee is capital, so it gets no deduction and is simply left out.

This simplified tax calculation assumes a 12-month Corporation Tax period, no associated companies and no other income or adjustments.

The tax computation then reads:

Accounting profit: £9,000
Less qualifying pre-trading expenditure (CTA 2009 s61): £2,400
Taxable trading profit: £6,600
Corporation Tax at 19%: £1,254

The accounts still show £9,000 profit this year and the £2,550 loss as last year's comparative. Only the tax computation changes.

Before you start

The day trading began: It decides which period gets the deduction. If HMRC's Corporation Tax period starts on that day rather than at the start of your accounts, read dormant company started trading: accounts and CT600 dates first.
A list of the costs: What each cost was for, when it was incurred and which accounts it appears in. Keep the receipts.
The qualifying total: Only the costs that meet every condition above and are not in this year’s expense figures. That decision is yours, or your accountant’s.
Company UTR and Government Gateway details: Where to find your UTR · Government Gateway

The company and all figures on this page are fictional.

Where to enter it, step by step

The field is called Qualifying pre-trading expenditure and sits in the Tax adjustments section of the wizard, next to Disallowable expenses. Enter whole pounds. The steps below use Hornbeam Example Ltd.

Start a new filing
Dashboard, company card
Click New filing. If you see Resume filing, click the small arrow beside it and choose Start new filing →
Confirm the company
Tick the confirmation box, then click Continue with this company →
Company Profile & Period
Accounting period
1 April 2025 to 31 March 2026
Special tax regimes
No
What are you filing?
Companies House & HMRC CT600, or HMRC CT600 if the accounts are filed at Companies House another way
Filing purpose
Standard return
My HMRC Corporation Tax period is different from my statutory accounts period.
Leave untickedTick it only if HMRC's Corporation Tax period starts later than your accounts. Dormant at first, then trading
Trading status
ActiveThe form starts on Dormant, so make sure you change it. Trading status explained
What the company does
Trading
Click Next →.
Financial Data
Enter this year’s accounts figures as usual, then the claim under Tax adjustments.
Previous year
Last year’s figures, from your previous accountsRequired before you continue. Figures from Companies House fill in where available. Check them, and enter 0 where a line had no amount.
Turnover
38000Box 145
Cost of raw materials and consumables
0
Staff costs
12000
Other charges
17000This year’s costs only. The £2,400 is in last year’s accounts.
Company tax type
Standard company
+ Show all adjustment options
Click itThe field is one of the optional adjustments. Once it has an amount it stays shown.
Qualifying pre-trading expenditure
2400Whole pounds. Enter only costs not already in this year’s expense figures.
Disallowable expenses
Leave emptyUse it for any part of this year’s expenses that is not deductible.
Balance sheet
Your balance sheet at 31 March 2026
Average number of employees
Your average number of employees
Click Next →.
Review & file
The Corporation tax due card for Hornbeam Example Ltd shows:
Corporation tax due
£1,254 .00
On taxable total profits of £6,600 at 19.0% · small profits
Optional
Click Preview your documents (free) and check the computation line for the deduction
Subscribe
Click Unlock Filing and complete payment
Continue
Click Continue to submission
Filing credentials
Corporation Tax UTR
Your 10-digit UTR
Gateway User ID
Your Government Gateway user ID
Gateway Password
Your Government Gateway password
Authentication code
Only shown if you chose Companies House as well
Select the director submitting this return
The director’s name
Accounts approval date
The date the directors approved the accountsWhat to enter
Declaration
Tick it
Click Submit to HMRC & Companies House, or Submit to HMRC.
After you submit
The filing page shows each submission under Gateway submissions, then Accepted once it is confirmed. HMRC usually replies within a few minutes, but it can take longer.
More help: Filing statuses explained · Paying your Corporation Tax

If your company was dormant and then started trading part way through an accounts year, check dormant company started trading: accounts and CT600 dates first, because your Corporation Tax period may start later than your accounts period.

Sample outcome

£1,254Corporation Tax on £6,600 at 19%, after the £2,400 deduction

Computation lineLess: Qualifying pre-trading expenditure (CTA 2009 s.61). No CT600 box of its own.

Accounts unchangedThis year still shows £9,000 profit, with last year’s loss as the comparative

Pre-trading expenses when your accounting period is longer than 12 months

If your Corporation Tax period files as two CT600 returns, qualifying pre-trading expenditure belongs to the return covering the day trading began. It is not divided by the number of days in each return. HMRC explains this start-date treatment in BIM46355. A longer statutory accounts period with only one Corporation Tax return does not need a split.

For example, suppose the displayed returns cover 1 January to 31 December 2025 and 1 January to 30 June 2026. If trading began on 1 February 2026 and the qualifying costs are £2,000, enter £0 for return 1 and £2,000 for return 2.

Enter the qualifying total once in Qualifying pre-trading expenditure.
Use the split panel immediately below that field, headed Tell us which tax return your pre-trading expenditure belongs to. Check the two return dates and enter your allocation. The starting suggestion puts the whole amount in return 1.
Select Confirm this split, then review both returns before submitting.

If you change the dates, review your draft details and confirm the splits again. This allocation does not itself amend an earlier Companies House filing. Read more about long accounting periods and two CT600 returns.

Do not claim the same cost twice

Not in the field and in your expenses. Only enter costs that are not already inside this year's expense figures. A cost sitting in your expenses is already being deducted.
Not in the field and in losses brought forward. If the company was not trading in the earlier year, its accounting loss is not a trading loss for tax, so there is nothing to put in Trading losses brought forward. The pre-trading field is the only place the amount goes.
Not in the field and in capital allowances. Equipment goes through capital allowances only.

If you are not sure

Whether each cost qualifies is your judgement as the person filing, in the same way it would be if the company had already been trading. Keep the receipts and a simple list of what each cost was for. Determine which costs qualify before entering the prepared claim. Our instructions explain where figures go, but we do not decide the treatment. Use the official guidance above or your adviser where a cost needs accounting or tax judgement. This article is general guidance, not tax advice.

Property business never started? Read about costs before the first letting.

Not the right guide?

Open the guide that matches where the costs are in your accounts.

Dormant at first, then tradingHMRC’s Corporation Tax period starts when trading began.First CT600 when trading started after incorporationThe costs are inside the first accounts.Trading status: Active or DormantThe company has not started trading yet.

Looking for a different field or step? See all filing wizard guides →

More help: Disallowable expenses, explained

Official sources

Whether this route matches your filings is for you to decide, yourself or with your accountant.

Example companies and figures are fictional. Field names match the filing wizard as of 12 October 2026.