VAT FRS & incorporation of sole trade

VAT FRS & incorporation of sole trade

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in order to take advantage of 1% discount on new registrations using FRS?
nick farrow

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Euan's picture
By Euan MacLennan
21st Dec 2006 12:48

VAT registration
A limited company is a separate legal entity. If you want to register it for VAT, you have to make a new application on form VAT1 or online, so you restart the clock for the 1% discount on the Flat Rate Scheme.

If you want to continue to use the sole trade's VAT registration number, you can apply for it to be transferred on form VAT68.

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By AnonymousUser
21st Dec 2006 16:35

But be prepared ...
for an argument if you transfer the registration number. When a client of mine did exactly this, Customs argued long and hard that because the registration had been transferred then the effective date of registration was that of the sole trader and since this was more than 1 year previously the discount did not apply.

However, I argued longer and harder (as I do) that it is the registration number, not the registration, that is transferred . Pedantic, but very important. Because the company had only come into existence on transfer of business, it could not possibly have been registered before it was incorporated. Relying heavily on the wording of the legislation I eventually won the argument. It cost the client a bit in fees but well worth the effort.

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By nick farrow
21st Dec 2006 18:52

thanks David & Euan
thanks for this I was going to get new number anyway to avoid that argument -

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