VAT implications when running two Businesses

by **welshman** on Wed Nov 23, 2011 5:51 pm

Is it allowable to run two businesses, only one of which is a limited company supplying mainly B2B markets, the other a partnership (or company) selling to consumers (and under the VAT threshold)?

by **welshman** on Wed Nov 23, 2011 5:54 pm

Sorry - that got mangled. Should have read;

Is it allowable to run two businesses, one of which is a VAT registered limited company supplying mainly B2B markets, the other a non VAT-registered partnership (or company) selling to consumers (and under the VAT threshold)?

by **Generix** on Thu Nov 24, 2011 11:08 am

welshman wrote:Sorry - that got mangled. Should have read;

Is it allowable to run two businesses, one of which is a VAT registered limited company supplying mainly B2B markets, the other a non VAT-registered partnership (or company) selling to consumers (and under the VAT threshold)?

While it is possible, it is not the easiest of things to set up. Especially where the businesses are so similar and you may have shared premises/costs/ownership etc.

The more difficult to distinguish the businesses as 'seperate' the higher chance of a successful challenge by HMRC.

by **welshman** on Thu Nov 24, 2011 1:26 pm

OK thanks.

I'd just assumed that as a separate entity the company would be VAT registered and the owner, while a shareholder in the company, would be treated as a separate entity as a sole trader in the second business.

Time to call the accountant I think.

by **Generix** on Thu Nov 24, 2011 2:29 pm

welshman wrote:OK thanks.

I'd just assumed that as a separate entity the company would be VAT registered and the owner, while a shareholder in the company, would be treated as a separate entity as a sole trader in the second business.

Time to call the accountant I think.

1 Word of warning, don't just go to any accountant, make sure one you use is experienced in VAT and has looked at this area in particular previously.

I think it is fair to say that most accountants are stronger in corporate/business and personal tax than VAT, so I would seek a specialist.

Happy to offer more guidance if you like.