Member Since: 9th Jun 1999
Hi, I am a VAT Consultant, part of the team at vatadvice.org We are based in Cambridgeshire. We work largely with charities but also advise a range of commercial organisations.
I have over 30 years experience in VAT, and am currently also a part-time member of the Tax Tribunals.
VAT Consultant vatadvice.org
28th Nov 2019
Yes, in my view, the client should receive a reasonably robust written report, providing clear reasons why the supply is taxable rather than exempt, or vice versa.
27th Nov 2019
Care falls into the welfare exempt when it is provided by a charity or state-regulated provider. From your comments this seems not to be the case, so the supplies are taxable.
(HMRC are starting to challenge such rulings, and try to argue FOR exemption, so make sure you have a more formal ruling in writing.)
20th Nov 2019
If the second business is operated by the same partnership, then the existing VAT registration will apply to both. You will have to charge VAT immediately.
You may decide to set up, for example, a limited company, to operate the second business. This would not be registered for VAT unless it reached the turnover threshold.
There are other issues to address; I would advise having separate websites. Since the two businesses share premises you should have a simple rental agreement or similar. And. your first business probably cannot use the VAT Flat Rate Scheme.
Whichever advice you decide to follow, make sure you have it in writing!
20th Nov 2019
Presumably if someone 'makes up' cost of sales, that is dishonest!?
(Or am I being naïve?)
19th Nov 2019
14th Nov 2019
Is the CIC actually supplying educational activities? If so yo could check whether it is an eligible body for the purposes of the exemption.
If so, then perhaps it doesn’t need to register. And, if it were to register, the FRS would not be a good idea.
I do recommend, in line with my colleagues, more detailed professional VAT advice.
11th Nov 2019
I would not advise splitting the business in the circumstances you describe.
Different partnerships can work as long as the partners are genuinely involved in the business.
8th Nov 2019
I agree with you. I have seen both of these two outcomes:
1. output tax charge in deregistered company; and input tax recovered in newly registered company; and
2. no output tax charge, as the company is still registered (and the change in VRN is merely administrative).
So, in neither case, was output tax ultimately due.
6th Nov 2019
Don't ignore the VAT issue. Although the reported income is less than the registration threshold, if it is consideration for a supply then the company could voluntarily register for VAT to recover input tax on start-up costs.
Do consider direct and indirect taxes and plan ahead. I would suggest a meeting with your Accountant to definitively decide these issues.
6th Nov 2019
You are not required to complete a VAT 68 unless you want to retain the vendor's VAT number. Since he is being obstructive I would advise against it.
Whether you need to complete a VAT 1 depends on the nature of the acquisition. Have you bought the business, or bought shares in the business? (Either way I suggest you engage a specialist to walk you through this and check the documentation carefully.)