(totally unrelated to my other VAT question this morning).
If a partnership is VAT registered, does it follow that by default the individual partners are?
H+W partnership need to register (t/o £120k), H is also a sole trader (t/o £30k). He'd prefer not to be.
Related question: if partnership t/o was £80k and s/e t/o £80k, would neither have to register?
Thanks
Replies (5)
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It is possible to be a sole trader and a separate partnership, they are two different persons for VAT purposes. You could also have two different partnerships as long as they have a different composition* (ie, Partnership 1 = husband and wife, Partnership 2 = husband and wife and daughter).
*exception for Scottish partnerships
But artificial separation is a different topic. Whether you have 3x limited companies or a sole trader + partnership + limited company, the disaggregation rules are always in play.
In your scenario, it depends what sole trader "H" does which will determine if their £30k income should be included in the partnership turnover or not and you need to apply the 3 conditions HMRC use for artificial separation - organisational, economic and financial links.
This really isn't a good idea.Currently same email address and both trades use the same bank account in his personal name.