Sole Trader to LTD to avoid VAT

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Hi, I have a sole-trader client who is about to reach the vat threshold. He want's to register a LTD comapny and start trading from it to avoid VAT for now. 

Just checking what your advice will be from legal point of view ? If he register a LTD does the company start at 0 ? etc ? 

 

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chips_at_mattersey
By Les Howard
24th Jan 2019 08:40

If his turnover is less than the registration threshold then the turnover resets to zero when he changes.
1. you will find some more analysis of this issue in the Community section;
2. not all practitioners agree with me!

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By legerman
24th Jan 2019 09:17

There is nothing stopping your sole trader client becoming Ltd, and indeed the turnover does reset as Les says. However the reason must not be to avoid going over the threshold for VAT, so I'm sure you will have a different legitimate reason for the client going Ltd.

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