sole trader is currently running a women's hairdressers as a sole trader - turnover is under the threshold. the client is considering opening a gents hairdressers down the road.
If he runs them both as a sole trader, I understand that the turnover will be totalled and therefore he will go over £81k.
However could he run one as a Limited company and potentially have neither of them VAT registered? Assuming they are both below £81k in turnover?
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Feasible but with extreme caution
I consider the propopsition to be feasible for the following two reasons:
Separate locationSeparate trade
The risk areas potentially are:
Using same suppliers and inter-dependenancy / cross-over suggesting one business rather than twoClient might fail to follow detailed advice on how to make the proposition watertight (eg. supplier invoices in wrong names, and other corner-cutting slip ups)
When I say "watertight" I mean fairly safe from challenge from a back-dated assesssment viewpoint (ie. HMRC assertion that the arrangements are a sham).
It might be that a less risky approach would be the long established "chair rental" scheme.