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Change from Sole trader to Limited Company

Change from Sole trader to Limited Company


I have my business of fruit and veg which I started 2 years ago. I am registered as a sole trader. I now intend to switch to Limited company. I am also registered for VAT. Could you please advise what happens to my VAT registration? I mean do I have to de-register as a sole trade and register again for Ltd co. even though my business activity is the same. Or do I simply have to inform HMRC re change of status from sole trader to Ltd Company.

I look forward to hear from everyone.

Many thanks!!


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By DMGbus
08th Apr 2011 08:49

VAT forms VAT1, VAT7 and VAT68

Assuming that there's no old debts or VAT problems with the old VAT registration for the sole trader then TWO VAT forms can be used:-

VAT1 - To VAT register as Limited Company

VAT68 - Keep the same VAT number as sole trader had for the Limited Company, taking over any rights to VAT repayments and any liability for VAT owing or errors of the sole trader.

If it is considered NOT a good idea to takeover the VAT number of the sole trader, then form VAT7 would be completed by the sole trader and VAT68 NOT completed - then a "clean" new VAT number will be issued to the Limited Company.

When the old and new businesses are in the same ownership I normally recommend the first option, ie. forms VAT1 + VAT68.


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