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This article explains how to manage company commencement and cessation events within Silverfin, as well as how to correctly handle and claim pre-trading expenditure.
These features allow you to:
- Accurately reflect commencement or cessation dates during a period of account.
- Automatically allocate Profit & Loss (P&L) balances to the correct accounting period (e.g., the period where trading occurred).
- Control which periods require a CT600 return submission.
- Tag expenses as pre-trading expenditure and carry them forward to future periods for relief.
Commencement and Cessation of Trade
- Previously, users were often required to submit returns for both periods in a long period of account, even if the company was not trading in the first period.
- Silverfin now allows you to specify a commencement or cessation date, which automatically adjusts return requirements and balance allocations.
How to Set Up Commencement or Cessation
- Navigate to the Return Information template.
- Locate the Period Information section. If you are working with a long period of account, Silverfin will automatically split this into two accounting periods.
- Find the question: "Is there an event in the period, for example, commencement or cessation?"
- Select Commencement (or Cessation) from the dropdown menu.
- Enter the specific Commencement Date (the actual date trading began).
What happens next:
- Period Splits: Silverfin adjusts the accounting periods based on the date entered. For example, if the commencement date is 1st June, the first period will end on 31st May.
- Return Requirements: A new question will appear: "Is a return required for accounting period one?"
- By default, this is set to No for a commencement scenario.
- The column for the first accounting period will be hidden, and no return will be generated or submitted for that period.
- If you do need to submit a return for the first period, simply change this setting to Yes.
- Balance Allocation: Silverfin automatically allocates P&L balances (such as turnover) entirely to the active trading period (e.g., the second period in a commencement scenario). You can review this in the Trading Income schedule. Adjustments can still be made manually if necessary.
Attaching Accounts and Computations
For each period, you must specify if you are attaching accounts and computations:
- Computations: Note that Silverfin generates one single computation for the entire period of account.
- Submission: Typically, in a long period of account, the single computation is submitted with one return. For the other period, you should select that the computation is not submitted because "The computation is provided with a separate return."
Note: Silverfin currently supports a maximum of two accounting periods. Scenarios requiring three returns (e.g., a long period featuring an event that splits the timeline further) are not supported.
HMRC Submission Updates
The selection of which return to submit is now handled entirely within the Return Information template.
- In the submission screen, you no longer select periods manually.
- Instead, use the "What type of return are you submitting?" option in the Return Information section.
- A new option for No return is available for periods that do not require submission.
Pre-Trading Expenditure
This feature allows you to categorise expenses incurred before trading begins and carry them forward to be claimed as a business expense in a future trading period.
How to Tag Pre-Trading Expenditure
- Go to the Profit and Loss - Other Comprehensive Income schedule or the Tax Analysis template.
- Locate the expense you wish to tag (e.g., Rent).
- Assign the new tax category/treatment called Pre-trading expenditure to the relevant amount.
Managing and Claiming the Relief
Once expenses are tagged, they flow into the new Pre-trading expenditure schedule.
- Review the Schedule: Open the Pre-trading expenditure schedule to see the amounts pulled through. You can add descriptions to reconcile the balance.
- Carry Forward: Any unclaimed amounts will automatically be calculated as "Carried Forward" to future periods.
- Claiming the Expenditure:
- When you are ready to claim the relief (e.g., in the period where trading commences), open the Pre-trading expenditure template.
- Tick the checkbox to indicate you wish to claim the expenditure in the current period.
- Select the correct Business Type and Accounting Period (e.g., the second period where trading started).
- Verification: Navigate to the Trading Income (or Property Income) schedule. You will see the claimed amount appear as a deduction in the bottom table, reducing your taxable profit.
This process ensures all pre-trading expenses are tagged correctly for iXBRL and deducted in the correct accounting period.