Company separation for Wholesale & Retail businesses

Company separation for Wholesale & Retail...

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Please can someone advise on the following:

Married couple run a partnership business that has been selling ladies clothing online has for the past 5 years. They have never hit the VAT threshold and therefore not registered for VAT.

Same married couple from partnership then start a wholesale clothing company that ships in the same type of clothing that they have been selling for the past 5 years but in large quantities, very large quantities. This new wholesale company will turn over roughly 300k per year and so is registered for VAT from the off. The wholesale company will sell to trade customers and charge VAT. They will also sell to the Partnership that they own and charge themselves VAT. First question, is this all ok and above board so far...basically a couple own a VAT registered wholesale business and a non VAT registered partnership from different premises and sell to themselves?

To make things more complicated one person from the partnership sets up a separate retail business selling mens clothing online. This retail business turns over around 140k per year and so registers for VAT but goes onto the flat rate scheme. Again the wholesale business that they own sells to this company and charges them VAT. Is this still legit? This mens clothing retail business is again run from different premises to the wholesale company and partnership.

Can the 3 companies above be classed as 3 separate entities run from 3 separate addresses and therefore all ok or is this clear artificial separation and will be clocked straight away and face consequences?

Any advice really appreciated.

Thank you

Replies (1)

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Scalloway Castle
By scalloway
10th Feb 2016 19:51

Do you really mean partnership?

Do you really mean partnership or are these separate limited companies?

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