Reply To: Avoiding VAT by reducing sales

Forum Categories VAT REGISTRATION Avoiding VAT by reducing sales Reply To: Avoiding VAT by reducing sales


Firstly f your taxable turnover exceeds £85k in any 12 month period to need to register for VAT. If you have already breached this then it is to late.

Most businesses restricted their turnover to remain outside the VAT system because they expected VAT registration to negatively affect their profit, or their competitiveness if the cost was passed on to their customers, with businesses with a higher proportion of business-to-consumer sales and low input costs worried about a substantial financial impact.

However i read about some academic research that found that restricting business activity often involved considerable effort and monitoring of turnover, and turning down work could impact on a business’ reputation, hence may not always be the best option.

As you may or may not be aware, the government are looking to reduce the VAT threshold anyway, so using my crystal ball, you will required to register in the near future regardless in all likelihood.

Creating one company for each day of the week will obviously not work as HMRC will look at this as artifical separation of business -see here: