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Dual Entity & VAT help

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A client of mine is a plumber, he has just taken on a large commercial contract and up until now he has done mainly small private work. The commercial work is of a scale which will require him to become VAT registered, a practice which will either make him more expensive to his smaller jobs or eat into his profit margins.

The idea I have is to incorporate a ltd company which will be VAT registered to handle the commercial larger jobs whilst he continues to work self employed to handle the smaller jobs below the VAT threshold.

Is there anything that I'm missing which could make this complicated?

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By Cheshire
06th Jun 2020 11:30

Quote:

A client of mine is a plumber, he has just taken on a large commercial contract and up until now he has done mainly small private work. The commercial work is of a scale which will require him to become VAT registered, a practice which will either make him more expensive to his smaller jobs or eat into his profit margins.

The idea I have is to incorporate a ltd company which will be VAT registered to handle the commercial larger jobs whilst he continues to work self employed to handle the smaller jobs below the VAT threshold.

Is there anything that I'm missing which could make this complicated?

Artificial separation.

Would normally have a few questions, but its all a bit pointless given you have posted anonymously.

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By petersaxton
06th Jun 2020 11:54

The lack of legality in your proposal.

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By anapa
06th Jun 2020 12:25

You can only do this if your client has two completely separate trades. Based on your post it appears he/she does not. So no, don't do it.

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RLI
By lionofludesch
06th Jun 2020 12:36

Will he have two vans ?

One for company work and one for self employed work ?

Two sets of tools ?

Two different addresses ?

It's not real, is it ?

What you see as a clever and innovative idea is actually a loop-hole spotted and closed nearly 50 years ago.

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