Hi everyone. Any help on this would be much appreciated!
We are in the process of filing our first tax return to HMRC, and have run into some issues I hope someone can help us with. We started a L.L.P (Registered in the U.K) with one partner in Japan and the second resident in the U.K. We basically buy in mobile electronic display devices from China which we hope to rent to event organizers in the U.K. Secondly we are prototyping a separate static device which uses the same display technology, again for eventual rent to retailers. I have several questions and hope thats ok:
1. Some of the purchases of equipment & supplies were made from Japan (Personal Credit Cards etc) while others were from the U.K. before and since we set up a U.K. Business Bank account. Do we need to categorize these separately for HMRC do you think?
2. As the display devices are not for sale should they be accounted for as 'Cost of Sales' (COGS), 'Cost of Equipment' or Expenses- 'Reselling Goods (Stock)' or alternatively as Capital Expense / Allowance?
3. For the prototyping device, do you think the components, materials and tools are considered again 'Cost of Sales' (COGS), 'Cost of Equipment' or Expenses- 'Reselling Goods (Stock)'?
We have not started any renting yet so essentially have no sales etc so are not expecting any tax outlay or tax return scenario, so are operating essentially at a loss if that makes any difference.
Apologies for the long-winded thread. I have tried HMRC but they are all scratching their heads and hope there is someone out there who can help. Kindest Regards,