VAT Registration because of reaching threshold

VAT registration

Didn't find your answer?

I am a CIMA member in practice working with a business that has just registered for VAT.

He was a self employed scaffolder who became incorporated and started a cleaning business.  He has also started offering scaffolding services and this has taken the business over the VAT threshold.

He is now registered for VAT but is having trouble with domestic cleaning contracts he had as he is no longer competitive.

He has been told by friends that are accountants that he can start another company and have one company with domestic cleaning contracts not VAT registered and another VAT registered.  I have been looking at the advice on HMRC website and I don't think he can do this as he will be the director of both (or his wife will be of one and he of the other) and the companies will operate from the same address. 

I think that the artificial separation of trade legislation would apply in this case but I want to make sure I am advising my client correctly.  Please can anyone help me to advise my client correctly?

 

Replies (1)

Please login or register to join the discussion.

RLI
By lionofludesch
24th Sep 2016 19:13

It's not straightforward but the position doesn't look good.

How likely is it that the two companies will never have any dealings with each other ? Such as lending money to one another, sharing staff, sharing assets .....

Add that to the fact that it was recently just one company and trouble lies ahead.

Thanks (0)