How to avoiding VAT registration by splitting businesses

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  • 26 July 2018 at 14:42 #55492
    Baker
    Member

    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?

    29 July 2018 at 19:47 #55858
    vatconsultant
    Member

    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. see detailed answer here: http://vatforum.co.uk/viewtopic.php?id=41

    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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