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Where Taxpayers and Advisers Meet

VAT Question

IntoleranceLab
Posts: 6
Joined: Mon Jul 30, 2018 6:36 am

VAT Question

Postby IntoleranceLab » Wed Dec 05, 2018 1:03 pm

Hi Guys

I have a small business . We make some money on our website and some money via a deal on groupon.

We pay a lot in google adwords and therefore we are heading close to the vat threshold.

I have split the company into two seperate ltd companies.

One to deal with each set of customers . Each company has a different director , different employee and uses different equipment at a different address.

Do I have anything else I need to be aware of ??

Now while sorting this out I have been having payments made into a mixture of accounts all in my name , is this a huge problem ?

Kind regards

David

robbob
Posts: 2662
Joined: Wed Aug 06, 2008 4:01 pm

Re: VAT Question

Postby robbob » Wed Dec 05, 2018 1:48 pm

while sorting this out I have been having payments made into a mixture of accounts all in my name , is this a huge problem ?

That's probably about as stupid as "stupid is as stupid does" if you want to prove to the vatman that these are two separate entities and are unrelated for artificial separation purposes, however i would say to the extent that the company is trading and unable open a business account immediately or similar for paypal there may be a genuine reason why the money would flow temporarily through an account you use on behalf of the company - so potentially no biggie but its not a great start :)

PS congratulations on spotting that payments made to google count towards your sales turnover for vat registration purposes - something hmrc don't seem to greatly advertise - the rules being so illogical hmrc should be obliged to run adverts once a month on i'm a celebrity pointing this fact out ! - or better still pay for nice slogan in the background in camp :)

I probably would recommend reading this ~"general advise" article (hmrc may have a different spin on things than this advise though) - sort of gives some initial indicators - horrible area to give advise on unfortunately as there is a clear absence of any black or white answers - other than i would say get all of the detail correct to the best of your ability if you go down that route and keep the separate hats on at all times.

https://www.theaccountancy.co.uk/articles/artificial-separation-company-6639.html

IntoleranceLab
Posts: 6
Joined: Mon Jul 30, 2018 6:36 am

Re: VAT Question

Postby IntoleranceLab » Wed Dec 05, 2018 4:36 pm

Thank you so much for your reply.

The companies do have their own business accounts , BUT had a nightmare with groupon not adding a proper reference and my rubbish bank attributing it to the wrong account .

I thought this may become tricky.

I also have a question regarding the Groupon business.

Groupon charge 50% of the sale as their fee .
They then charge me VAT on this fee.

If I register for VAT I can claim this back but would I have to pay vat on the portion I am left with ?

This sounds like good advice regardless , am I right ?

Thanks again for your time .

Kindest regards
David


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