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Where Taxpayers and Advisers Meet

Avoiding VAT registration

bojker26
Posts:6
Joined:Tue Apr 19, 2016 10:45 pm
Avoiding VAT registration

Postby bojker26 » Thu Nov 02, 2017 10:57 pm

I run a coffee truck with turnover just less than the VAT threshold. It returns a modest profit but largely down to not being VAT registered.

I would like to have a second van. Am I able to register it under a different company and would it therefore have it’s own threshold? I assume that everything would have to be separate.

If not could I sell a stake of the business to someone so that it had a different ownership structure? Would that make a difference?

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: Avoiding VAT registration

Postby bd6759 » Thu Nov 02, 2017 11:04 pm

If you have 2 businesses operating similar trades, the turnover is aggregated.

bojker26
Posts:6
Joined:Tue Apr 19, 2016 10:45 pm

Re: Avoiding VAT registration

Postby bojker26 » Fri Nov 03, 2017 2:41 pm

Even if the ownership is different?

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: Avoiding VAT registration

Postby bd6759 » Fri Nov 03, 2017 6:23 pm

The implication from your question was that you wanted a new truck to increase your profits.

If I decide a buy a truck tomorrow and start the same type of business as you, then of course my turnover would not be aggregated with yours. But that is not your question. You are asking if you can artifically break up the business to give the appearance that they are independent, but you will still, somehow, increase your profits. The answer to that is no.

bojker26
Posts:6
Joined:Tue Apr 19, 2016 10:45 pm

Re: Avoiding VAT registration

Postby bojker26 » Sun Nov 05, 2017 11:40 pm

So you are saying, if I owned the first truck 50/50 with person A and the second truck 50/50 with person B, I would have to aggregate the VAT?

Seems unfair on person A and B who have 50% of a turnover less than the threshold!!

tomg35
Posts:6
Joined:Sat Dec 23, 2017 3:24 pm
Location:Guildford

Re: Avoiding VAT registration

Postby tomg35 » Sat Dec 23, 2017 3:54 pm

HMRC may ask questions why you would require a separate company. One possible view they might take is that creation of the new company is a deliberate attempt to avoid registration (especially as you are a 50% owner) and compulsory register you.

I would strongly advise you to seek the advice of an accountant (or even HMRC) before you start trading with the second company (HMRC can and do backdate registrations).


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