Topic: Avoiding VAT by reducing sales
I have a limited company that provides consultancy services. The turnover (invoices for services) is just tipping over the VAT limit now, but is likely to hover around £85K to £90K in the foreseeable future.
I cannot increase the price of my services by 20% for VAT as that would make me uncompetitive, plus I have a lot of existing clients on a fixed fee without VAT contract. So, if I have to register for VAT, it will effectively lower the income to the business as I will just have to charge a lower fee before adding VAT to it and swallow the cost myself rather than passing it on.
Instead im thinking of reducing growth and sales to keep the turnover under £85k. Is this an issue with HMRC.
Alternatively im thinking of creating a new business under separate company and make it distinct from my current company. Will this work.
Many thanks indeed if anyone can explain what I should/have to do?