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Beauty Therapist and VAT disaggregation

Beauty Therapist and VAT disaggregation

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Client is a Beauty Therapist whose business has grown dramatically from £40k turnover to £140k turnover moving to a state of the art salon in the centre of a major city. Client did not want to VAT register. I advised that this wasn't a choice in the period where VAT registration became required during this growth and explained disaggregation. Business sells lashes tanning and Beauty. Client has come back saying they dont want to pay VAT and want to setup at home as separate business etc etc etc so they can spit their income in both and avoid VAT registration. Last time I was in this position I explained that I would need to resign unless client VAT registered and she took the advice and did so. She wont now. Spends too much and doesnt want lifestyle affected by VAT. Same old story.

I cannot see any legal way of avoiding the disaggregation rules. This business is obviously run by my client from an obvious location and advertised extensively with glossy website. I am expecting client might try setting up business in partners name to try to blur the connection because this is what her Mum and sister have both done (not my clients) and they are both getting away with it.

Is there any valid way of splitting this business that I may have missed?

Thanks

Regards   

  

       

Replies (3)

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chips_at_mattersey
By Les Howard
11th Nov 2019 09:27

I would not advise splitting the business in the circumstances you describe.
Different partnerships can work as long as the partners are genuinely involved in the business.

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By Louisemunro320
12th Nov 2019 08:49

I have exactly the same problem with a similar client. I made it quite clear I was not happy with the situation but in the end left it up to her. We can only advise and clearly more and more clients will do what they want to in the end. I used to take the moral stance and ask them to leave but its got to the point now where I would lose a lot of clients if I did this. I wrote to her formally advising against her 'vat avoidance' and if she chooses to ignore this there isnt much I can do.

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Replying to Louisemunro320:
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By JoF
12th Nov 2019 08:59

If she chose to ignore you then you would keep her on? Aid and abet? Would not report this under MLR?

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