ACCA · Question 18 · Corporation tax liabilities
Section B - Case 1 (NovaStream Ltd)
Prior to commencing trade on 1 January 2023, NovaStream Ltd incurred £12,000 on market research and £8,000 on domain registration in November 2022.
How are these pre-trading expenses treated for Corporation Tax purposes?
Answer options:
They are not allowable because they were incurred before the company started trading.
They are treated as a trading expense incurred on the actual date of payment in November 2022.
They are treated as a trading expense incurred on 1 January 2023.
They must be capitalized and cannot be deducted from trading profits.
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