---
title: Spending before you earn
description: Spending before you earn
---
[Skip to content](https://help.1stformations.co.uk/accounting-service/spending-before-you-earn#main-content)
[](https://www.1stformations.co.uk/)
- [Help Centre](https://help.1stformations.co.uk/)
Open main navigation
Close main navigation
- [Help Centre](https://help.1stformations.co.uk/)
- [Login](https://www.1stformations.co.uk/login/)
[Login](https://www.1stformations.co.uk/login/)
How can we help you?
- There are no suggestions because the search field is empty.
1. [Accounting Service](https://help.1stformations.co.uk/accounting-service?hsLang=en-gb)
2. [New Company Essentials](https://help.1stformations.co.uk/accounting-service/new-company-essentials?hsLang=en-gb)
3. [Before and Beyond Trading](https://help.1stformations.co.uk/accounting-service/new-company-essentials?hsLang=en-gb#before-and-beyond-trading)
# Spending before you earn
## How to fund it and what it means for your tax allowances
It is normal for a new company to spend money before it earns any. The costs are not wasted, and the funding is straightforward to record.
### How to fund it
Most directors lend money to the company, which sits as a credit on the director's loan account and can be repaid to you tax free once the company has income. The alternative is to put money in as share capital, which is more permanent. Either way, record every amount that goes in.
### The tax position
Business costs incurred before income arrives are still allowable. If the first period ends in a loss, the loss carries forward automatically and reduces Corporation Tax in the first profitable year.
💡 **Good to know:** Lending in through your director’s loan account is the simplest route for most new directors. We record it at onboarding, so repaying yourself later is clean and tax free.
### Not found what you're looking for?
Please get in touch and we'll be happy to help:
**Email:** You can submit a request using our [contact form](https://forms.1stformations.co.uk/contact/)
**Live Chat:** Select the live chat icon on the bottom right
- [Your Plan](https://help.1stformations.co.uk/accounting-service/your-plan?hsLang=en-gb#main-content)
- [Understanding Your Plan](https://help.1stformations.co.uk/accounting-service/your-plan?hsLang=en-gb#understanding-your-plan)
- [Compliance Included in Your Plan](https://help.1stformations.co.uk/accounting-service/your-plan?hsLang=en-gb#compliance-included-in-your-plan)
- [Your Xero Plan](https://help.1stformations.co.uk/accounting-service/your-plan?hsLang=en-gb#your-xero-plan)
- [Add-ons Explained](https://help.1stformations.co.uk/accounting-service/your-plan?hsLang=en-gb#add-ons-explained)
- [Working with Us](https://help.1stformations.co.uk/accounting-service/working-with-us?hsLang=en-gb#main-content)
- [How to Contact Us](https://help.1stformations.co.uk/accounting-service/working-with-us?hsLang=en-gb#how-to-contact-us)
- [Your Accountant and Support Team](https://help.1stformations.co.uk/accounting-service/working-with-us?hsLang=en-gb#your-accountant-and-support-team)
- [Keeping Your Details Up to Date](https://help.1stformations.co.uk/accounting-service/working-with-us?hsLang=en-gb#keeping-your-details-up-to-date)
- [New Company Essentials](https://help.1stformations.co.uk/accounting-service/new-company-essentials?hsLang=en-gb#main-content)
- [Getting Started](https://help.1stformations.co.uk/accounting-service/new-company-essentials?hsLang=en-gb#getting-started)
- [Before and Beyond Trading](https://help.1stformations.co.uk/accounting-service/new-company-essentials?hsLang=en-gb#before-and-beyond-trading)
- [What You Can and Can't Claim](https://help.1stformations.co.uk/accounting-service/what-you-can-and-cant-claim?hsLang=en-gb#main-content)
- [Benefits, Perks, and Grey Areas](https://help.1stformations.co.uk/accounting-service/what-you-can-and-cant-claim?hsLang=en-gb#benefits-perks-and-grey-areas)
- [Mileage, Travel and Subsistence](https://help.1stformations.co.uk/accounting-service/what-you-can-and-cant-claim?hsLang=en-gb#mileage-travel-and-subsistence)
- [Xero Training and Analytics](https://help.1stformations.co.uk/accounting-service/xero-training-and-analytics?hsLang=en-gb#main-content)
- [Weekly Xero Training Sessions](https://help.1stformations.co.uk/accounting-service/xero-training-and-analytics?hsLang=en-gb#weekly-xero-training-sessions)
- [Xero Health Checks](https://help.1stformations.co.uk/accounting-service/xero-training-and-analytics?hsLang=en-gb#xero-health-checks)
- [Syft Analytics](https://help.1stformations.co.uk/accounting-service/xero-training-and-analytics?hsLang=en-gb#syft-analytics)
- [Tax Reviews and Webinars](https://help.1stformations.co.uk/accounting-service/tax-reviews-and-webinars?hsLang=en-gb#main-content)
- [Annual Tax Efficiency Review](https://help.1stformations.co.uk/accounting-service/tax-reviews-and-webinars?hsLang=en-gb#annual-tax-efficiency-review)
- [Quarterly Business Performance Review](https://help.1stformations.co.uk/accounting-service/tax-reviews-and-webinars?hsLang=en-gb#quarterly-business-performance-review)
- [Topical Webinars](https://help.1stformations.co.uk/accounting-service/tax-reviews-and-webinars?hsLang=en-gb#topical-webinars)
- [Bookkeeping Basics](https://help.1stformations.co.uk/accounting-service/bookkeeping-basics?hsLang=en-gb#main-content)
- [Day-to-Day Bookkeeping Workflow](https://help.1stformations.co.uk/accounting-service/bookkeeping-basics?hsLang=en-gb#day-to-day-bookkeeping-workflow)
- [Bank Reconciliation](https://help.1stformations.co.uk/accounting-service/bookkeeping-basics?hsLang=en-gb#bank-reconciliation)
- [Recording Sales and Purchases](https://help.1stformations.co.uk/accounting-service/bookkeeping-basics?hsLang=en-gb#recording-sales-and-purchases)
- [Managing Receipts and Best Practice](https://help.1stformations.co.uk/accounting-service/bookkeeping-basics?hsLang=en-gb#managing-receipts-and-best-practice)
- [VAT Registration and Submissions](https://help.1stformations.co.uk/accounting-service/vat-registration-and-submissions?hsLang=en-gb#main-content)
- [Do I Need to Register for VAT](https://help.1stformations.co.uk/accounting-service/vat-registration-and-submissions?hsLang=en-gb#do-i-need-to-register-for-vat)
- [Submitting VAT Returns](https://help.1stformations.co.uk/accounting-service/vat-registration-and-submissions?hsLang=en-gb#submitting-vat-returns)
- [VAT on Sales and Purchases](https://help.1stformations.co.uk/accounting-service/vat-registration-and-submissions?hsLang=en-gb#vat-on-sales-and-purchases)
- [VAT Payments and Schemes](https://help.1stformations.co.uk/accounting-service/vat-registration-and-submissions?hsLang=en-gb#vat-payments-and-schemes)
- [Paying Yourself and Employees](https://help.1stformations.co.uk/accounting-service/paying-yourself-and-employees?hsLang=en-gb#main-content)
- [Paying Directors: Salary vs Dividends](https://help.1stformations.co.uk/accounting-service/paying-yourself-and-employees?hsLang=en-gb#paying-directors-salary-vs-dividends)
- [Your Payslip and National Insurance](https://help.1stformations.co.uk/accounting-service/paying-yourself-and-employees?hsLang=en-gb#your-payslip-and-national-insurance)
- [Dividends: Legal Process](https://help.1stformations.co.uk/accounting-service/paying-yourself-and-employees?hsLang=en-gb#dividends-legal-process)
- [Payroll Essentials for New Directors](https://help.1stformations.co.uk/accounting-service/paying-yourself-and-employees?hsLang=en-gb#payroll-essentials-for-new-directors)
- [Hiring and Employment Status](https://help.1stformations.co.uk/accounting-service/paying-yourself-and-employees?hsLang=en-gb#hiring-and-employment-status)
- [Corporation Tax and Year-End](https://help.1stformations.co.uk/accounting-service/corporation-tax-and-year-end?hsLang=en-gb#main-content)
- [Corporation Tax Fundamentals](https://help.1stformations.co.uk/accounting-service/corporation-tax-and-year-end?hsLang=en-gb#corporation-tax-fundamentals)
- [Allowable Expenses and Year-End Planning](https://help.1stformations.co.uk/accounting-service/corporation-tax-and-year-end?hsLang=en-gb#allowable-expenses-and-year-end-planning)
- [PAYE and Payroll Basics](https://help.1stformations.co.uk/accounting-service/corporation-tax-and-year-end?hsLang=en-gb#paye-and-payroll-basics)
- [Director's Loan and HMRC Communications](https://help.1stformations.co.uk/accounting-service/corporation-tax-and-year-end?hsLang=en-gb#directors-loan-and-hmrc-communications)
- [Losses, Rates and Reliefs](https://help.1stformations.co.uk/accounting-service/corporation-tax-and-year-end?hsLang=en-gb#losses-rates-and-reliefs)
- [Invoices & Payments](https://help.1stformations.co.uk/accounting-service/invoices-payments?hsLang=en-gb#main-content)
- [Creating Invoices and Getting Paid](https://help.1stformations.co.uk/accounting-service/invoices-payments?hsLang=en-gb#creating-invoices-and-getting-paid)
- [Invoice Numbering and Record Keeping](https://help.1stformations.co.uk/accounting-service/invoices-payments?hsLang=en-gb#invoice-numbering-and-record-keeping)
- [Personal Tax for Directors](https://help.1stformations.co.uk/accounting-service/personal-tax-for-directors?hsLang=en-gb#main-content)
- [Drawing Money from Your Company](https://help.1stformations.co.uk/accounting-service/personal-tax-for-directors?hsLang=en-gb#drawing-money-from-your-company)
- [Self Assessment Practical Guide](https://help.1stformations.co.uk/accounting-service/personal-tax-for-directors?hsLang=en-gb#self-assessment-practical-guide)
- [National Insurance and Benefits](https://help.1stformations.co.uk/accounting-service/personal-tax-for-directors?hsLang=en-gb#national-insurance-and-benefits)
- [Household Finances](https://help.1stformations.co.uk/accounting-service/personal-tax-for-directors?hsLang=en-gb#household-finances)
- [Using Xero](https://help.1stformations.co.uk/accounting-service/using-xero?hsLang=en-gb#main-content)
- [Getting Started with Xero](https://help.1stformations.co.uk/accounting-service/using-xero?hsLang=en-gb#getting-started-with-xero)
- [Bank Feeds and Making Tax Digital](https://help.1stformations.co.uk/accounting-service/using-xero?hsLang=en-gb#bank-feeds-and-making-tax-digital)
- [Xero for VAT and Payroll](https://help.1stformations.co.uk/accounting-service/using-xero?hsLang=en-gb#xero-for-vat-and-payroll)
- [Understanding your Numbers](https://help.1stformations.co.uk/accounting-service/understanding-your-numbers?hsLang=en-gb#main-content)
- [Key Accounting Terms Explained](https://help.1stformations.co.uk/accounting-service/understanding-your-numbers?hsLang=en-gb#key-accounting-terms-explained)
- [Reading your Financial Reports](https://help.1stformations.co.uk/accounting-service/understanding-your-numbers?hsLang=en-gb#reading-your-financial-reports)
- [Using Your Numbers to Make Decisions](https://help.1stformations.co.uk/accounting-service/understanding-your-numbers?hsLang=en-gb#using-your-numbers-to-make-decisions)
- [Your Compliance Calendar](https://help.1stformations.co.uk/accounting-service/understanding-your-numbers?hsLang=en-gb#your-compliance-calendar)
- Terms & Conditions
- Privacy Policy
- Cookie Policy
[](https://www.1stformations.co.uk)
[mailto:email@email.com](mailto:email@email.com)
 Copyright 2026 © 1st Formations
We are proud to be a Certified B Corporation™