2 Limited Companies - Are they separate for VAT

[twpbugger]

Hi all and thanks for your help in advance.

I have a limited company selling a clothing range in a city centre which is registered for VAT. I am opening a new clothing shop 50 miles away - Also a Ltd Company selling different clothing range, different suppliers etc but I will be the sole shareholder and director in both companies.

Does the new shop need to register for Vat immediately or would it be acceptable that this would be treated by HMRC as a separate business and not required to register for VAT until the new shop hit the turnover limit?

Thanks

[spidersong]

Without more information it's impossible to truly say, but with 2 limited and the separation you already have it should be easy to make sure they don't get counted together.

HMRC will only treat two different entities as being a single entity for turnover purposes where there are organisational, financial, and economic links that show they're actually just one business.

So as long as the businesses are kept separate; separate supplier accounts, customer bases, trading styles, bank accounts, not moving stock or shopwares back and forth between them, not moving staff from shop to shop, not paying each others bills or sharing costs, then each will have a separate turnover limit.

The mere fact that there is a common shareholder and/or director is not enough to aggregate two otherwise separate businesses.