Vat and change of entity

Change from sole trader to partnership how to notify the vat office under MTD?

Didn't find your answer?

My client is a vat registered sole trader and transfering to a partnership he wishes to keep the vat number, is this notified on line now or do we need to send in all the old forms VAT 1, 2 and 68? I have tried to contact the vat office but cannot speak to anybody and as usual you cannot find a definitive answer on HMRC website to what I believe is a straght forward question? Another concern is will agent authority for MTD be affected and we have to go through the authorisation process again?

Replies (4)

Please login or register to join the discussion.

By Jason Croke
08th Feb 2024 16:54

When registering the Partnership for VAT using the online process, there is a question as to why you are registering for VAT, options are :-

It’s selling goods or services and needs or wants to charge VAT to customers

It’s taking over a VAT registered business as a Transfer of a Going Concern

You’re changing the legal entity of the business (for example, from sole trader to limited company)

It’s a UK established overseas exporter

The business is established within the UK and will only make taxable supplies outside of the UK.

So go with its changing he legal entity option.

Fill out the VAT registration as usual and then before submission, the screens will ask if you want to keep the VAT number (the old VAT 68).

Personally, I would generally look not to transfer a VAT number unless the client has some sort of emotional attachment to it. Transferring a VAT number can take HMRC several months to action, so you could be stuck filing sole trader VAT returns whilst awaiting the transfer over to long as client is aware of the delays then you've done your job.

You can't send a VAT1 in the post anymore except for certain scenarios

Thanks (2)
Replying to Jason Croke:
By FactChecker
08th Feb 2024 18:10

And, OP's other question: "Another concern is will agent authority for MTD be affected and we have to go through the authorisation process again?"

I'd have thought, since by definition it is a different entity, then the answer is Yes?

Thanks (3)
By Di
09th Feb 2024 12:14

Thank you for your replies. I wish they would make things simpler and more efficient. Whatever happened to the saying 'tax doesn't have to be taxing'?

Thanks (0)
Replying to Di:
By Matrix
09th Feb 2024 12:35

My client’s govt gateway and MTD submissions did not change when the sole trade became a partnership. I only have 64-8 so the client is not on my ASA but don’t see why it would change.

Thanks (0)