I have an existing limited company client selling standard rated goods but under the threshold at mo. (t/o [£80k] £30k - see comments below).
They are looking at taking over an unrelated business (zero rated supplies, (t/o £140k)) and want to have both in same limited company
looking at registering the company for vat.....any problems with this before i advise????????????
thanks
Replies (8)
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Possibly
Yes, they might be handing over up to £12k per year in VAT for no good reason, not enough information to know just yet.
If the standard rated sales are wholly or substantially to VAT-registered customers, no problem. The extra 20% they'll now be adding on can be reclaimed back by most of the customers. But at the other extreme if this is retail to the general public then £12,800 less claimable input tax is the cost of this decision. Note the limit is £77k not £80k.
Agreed
Agree with the above. Also note if you mean their t/o is 80k they should be registered for VAT anyway regardless of acquisition
Why same company?
Why have the unrelated business in the same company?
Is the turnover of the unrelated business £140k? Just checking!
If I was acquiring an existing VAT registered business...
... I would not keep the VAT number.
But although generally and optimist, when it comes to tax, especially VAT, i am a pessimist!