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AGGREGATION FOR VAT REGISTRATION

AGGREGATION FOR VAT REGISTRATION

Client has 3 companies providing different standard supplies to the same market - commonly the same customers.

All owned 100% by one individual - also sole director of each.

Is it necessary to aggregate the supplies from all 3 companies for determining point at which registration required, or as separate legal entities, can they de dealt with individually and monitor when each approaches the registration threshold? 

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By DMGbus
09th Apr 2010 08:52

No automatic aggregation

Provided that the three individual entities are properly set up carrying out distinct indvidual activities with individual accounting records, individual bank accounts, distinct product lines and comply with business ownership disclosure rules there is no requirement to aggregate turnover to ascertain VAT registration liability date.

HMRC do, however, if they become aware of the situation have some powers to disaggregate the businsses but this can NOT be retrospective.  

Retrospective amalgamation could only be successfully imposed if HMRC could prove that the arrangements were a sham.

 

 

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