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New subsidary company / VAT Reigster?

New subsidary company / VAT Reigster?

Hello,

I own 100% of existing Company A which I am about to register for VAT, I pay myself basic salary + dividends... this is my only income. I am starting a new Company B with a business associate (50/50). I can either:

- Have Company A own my share of Company B

- Personally own my share of Company B and pay myself PAYE salary

- Personally own my share of Company B and invoice my services from Company A to Company B

What is the best option to minimise tax? Do I benefit from registering Company B for VAT? (The other person is in the same situation, except his own 'company A' is not registered for VAT).

I hope that makes sense? And I thank you greatly for your responses! (first time poster, long time user of this site) 

Doug

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01st Mar 2016 01:13

Sit down with an accountant and do some tax planning. Nobody can possibly answer any of your questions with the information given. It would take at least an hour long question and answer session to work out the best strategy going forward. None of the options you give are particularly tax efficient.

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01st Mar 2016 01:38

My accountant is on holiday for the next 2 weeks and I kind of wanted to get this sorted asap! Bad timing, I know.

I hoped it's a fairly simple situation but I appreciate you will probably know better! 

If none of the options are particularly tax efficient, what might you suggest?

thanks for your quick response

Doug

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By Brunel
01st Mar 2016 05:32

Wait 2 weeks

Fools rush in

It's not as simple as you think and a proper answer requires too much confidential information for a public forum

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01st Mar 2016 08:45

50/50
Use the two weeks to start talking to a lawyer about a shareholders agreement. Equal holdings can be nightmarish if anything goes wrong

But don't sign until you have seen the accountant

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By DMGbus
01st Mar 2016 08:45

Charge for common director's services - no VAT

The charge for a common director's services is not a supply for VAT purposes, by this I mean:

D is a director of A

D is a director of B

If either A or B charge each other for D's services then this does NOT carry a VAT charge as it is not regarded as a supply for VAT purposes as D is a common director.

I thought that I'd mention the above just in case your own accountant were to be unaware of this rule.

 

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