Please refer to my post some time ago, which led to the setup of a couple of persons using the same salon being set up to trade as self employed persons (i.e. both shared running costs of salon, but assessed for their individual variable income seperately) >>>https://www.accountingweb.co.uk/any-answers/hairdresser-set-up-advice
They now wish to incorporate which would see them go over the VAT threshold as one combined business now, trading under the Salon name as opposed to "person a @ salon name". They wish to do this as they want to employ staff and to split everything down the middle, pay selves a set wage/divi etc. as well as ring fencing themselves so to speak.
Their new accountant has kicked up a fuss and is arguing against the original set up (detailed in the other post) and saying they should have always been VAT registered, that this is "diversification to avoid VAT" and reitterated that to employ people you cannot be a sole trader (not disagreeing on this point).
A lease was take on the salon to which they both signed the agreement. Is this of any relevance to whether they are self employed or not?
NB: the salon itself isn't set up as a business and generates no revenue as such, it is just a place of work which the guys share the costs on.
What is your view on the accountants point? i believe that the VAT registration should be from date of new agreement is put into place - as this is then a partnership with a profit share arrangements as oppose to in the past where they have operated as individuals within the salon.
Thanks in advance as we both have differing viewpoints