non- VAT registered sole trader below threshold incorporates - in ascertaining turnover for VAT registration purposes do you look back 12 months including the sole trade turnover?
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No
I stand to be corrected, but on incorporation you get a fresh start for VAT turnover purposes.
If it's a TOGC the new company will inherit the taxable turnover of the sole trader business.
No
For the transferor's supplies to count towards the transferee's registration limit, following a TOGC, the transferor needs to have been VAT registered.
See VATREG29250.
Yes, no, yes, no?
Seems the O/P was wrong - there's no such thing as a simple VAT question
Simple? Perhaps!
"non- VAT registered sole trader below threshold incorporates - in ascertaining turnover for VAT registration purposes do you look back 12 months including the sole trade turnover?"
Has the previous entity been transferred, lock stock and barrel? If yes, then as already pointed out it falls, under VATA as: "A transfer of a Going Concern".
Ergo, the Ltd Co has acquired the obligations, debts and responsibilities of the previous entity.
Alternatively the new Ltd Co, could structure the acquisition where it purchases specified items: customer base; stock; whatever, free of any attendant liabilities and obligations.
In which case then it would be New Start and VAT would run from the date the VAT number was issued.
However; there may be good cause for NewCo to claw back significant Input VAT on stock, capital items etc purchased up to Six Months before registration.
All down to a Quick and Dirty Cost/Benefit Analysis.
It's deja vu all over again
See:
https://www.accountingweb.co.uk/anyanswers/question/vat-registration-23
or
https://www.accountingweb.co.uk/blog-post/togc-and-vat-registration
As pointed out there VAT law places relevance upon different legal entities, a sole prop and a ltd co are different legal entities. Different entities are only required to include a previous entities turnover if S49 of the VAT Act applies, S49 only applies where a taxable person transfers their business and S3 (1) of the VAT Act defines a taxable person as someone who is, or is required to be, registered for VAT.
The sole prop has no requirement to register at the point of transfer, he is not a therefore a 'taxable person' so the ltd company has no need to include his taxable turnover when calculating their taxable turnover for registration purposes.