Clean It Up
UK Window Cleaning Forum => Window Cleaning Forum => Topic started by: mike1986 on October 18, 2021, 07:05:35 pm
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I currently run my own window cleaning business and I also have 1 franchise set up. My turnover is currently just below the Vat threshold and I don’t wish to go above it. Would it be possible for my wife to buy a franchise from my company if it is run as a completely separate business? Obviously this would be a great way to increase the family income and it would mean my business still remaining below the vat threshold. It also would mean I have not deliberately split the business to avoid Vat as my company and my wife’s franchise would be a completely separate business. Anybody done anything similar? It’s very hard to get any advice online. I asked my accountant and he isn’t sure either.
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Ask your accountant
(But I get the feeling it’ll be a big “nope”.
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Hi, I run a franchised business. The franchisor is a Ltd company and I'm a franchisee along with the others, paying royalties into the Ltd Co. We're all below the threshold, my accountant was quite happy with that
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If you're doing it to avoid paying Vat my advice would be:
1. Stop posting about it on a public forum
2. Ask a chartered accountant
3. Stop posting about it on a public forum
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If you're doing to avoid paying Vat my advice would be:
1. Stop posting about it on a public forum
2. Ask a chartered accountant
3. Stop posting about it on a public forum
Soupy. Thanks for your reply. Perhaps I am wrong but as far as I understand it, it is only unlawful if I deliberately SPLIT a business to avoid Vat. What I’m suggesting is that my wife starts her own franchise to start at a future date that she will run independently. Therefore the 2 business were never 1 business. As I mentioned before, my account doesn’t seem to know the answer and it’s a bit of a minefield as so many accountants give different advice :-\
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Hi, I run a franchised business. The franchisor is a Ltd company and I'm a franchisee along with the others, paying royalties into the Ltd Co. We're all below the threshold, my accountant was quite happy with that
That’s interesting 🤔 thanks adman
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I reckon that if your wife is using the same address then the taxman will enquire deeply when you submit accounts.
Ask the tax office. If you are hesitant to do so then it would seem you know the motive is not acceptable to Inland Revenue.
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You aren’t allowed to have anything to do with that business I think the old Vat man might see you living with her as having something to do with it me thinks.
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will your wife do all the cleaning ? - where is the equipment coming from ? ( ie. she buying it/ same arrangement as the other franchise ) no shared equipment - office or otherwise
personally I think your treading a fine line - I would ask the VAT man ( they are very helpful ) you just may not get the answer you want but in the long run may save you thousands in fines etc..
Darran
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My guess is itd be fine so long you divorce her first and get separate homes
It would be far easier however just to pay VAT stop using so much energy and tricks to avoid it
I doubt having a completely separate business setup as a franchise will save you enough money to make it worthwhile at the amount you’re turning over
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What it will come down to is proving that you made the decision to do that based on sound business reasons and not to avoid VAT.
I'm sure you have a great answer for them ;D
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I remember the days on here where people used to dream and aspire to become vat registered! When one man bands were doing two, three-hour days a week and were always 'just about' to hit the vat threshold so would seek advice in order to publicly announce it! Them were the days!!😁
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Speak to your accountant and ask them to refer you to a VAT specialist. Those are deep waters you're jumping into. It's possible but you need to do it just right. It's so intricate that we didn't bother. One of the problems is that if you get even one detail wrong, the whole thing is wrong.
There's no point asking HMRC as they have a policy that they won't assess your plan to do anything complex before you start. They'll look once you're doing it. Their argument is that they aren't free consultants.
Vin
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Their argument is that they aren't free consultants.
Which is a horrendous attitude to take when you think about it.
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Their argument is that they aren't free consultants.
Which is a horrendous attitude to take when you think about it.
If it's really complicated though, I can see why they wouldn't want to waste taxpayer's money looking at presumably very many schemes people have come up with to assess whether they are legal or not. I'm guessing they'll answer simple questions?
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If it's really complicated though, I can see why they wouldn't want to waste taxpayer's money looking at presumably very many schemes people have come up with to assess whether they are legal or not. I'm guessing they'll answer simple questions?
So they won't tell you how to do it right but they will punish you for doing it wrong?
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If it's really complicated though, I can see why they wouldn't want to waste taxpayer's money looking at presumably very many schemes people have come up with to assess whether they are legal or not. I'm guessing they'll answer simple questions?
So they won't tell you how to do it right but they will punish you for doing it wrong?
I expect it's a cost/resources issue.
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I have a separate business running from my home address - it is not window cleaning related and when I was setting it up the Inland Revenue were very helpful as to whether there was any conflict of interest.
However as I asked more complex questions, while helpful in attitude the chap at the other end said I should consult a third party for professional advice.
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Their argument is that they aren't free consultants.
Which is a horrendous attitude to take when you think about it.
I guess it makes sense. What happens if my ideal tax reduction solution resembles the Double Irish with a Dutch Sandwich? (a real thing https://www.investopedia.com/terms/d/double-irish-with-a-dutch-sandwich.asp)
Should taxpayer money be used to assess a deeply complex tax accounting scheme and tell me whether I'm going to get away with it? I'd argue not.
Vin
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I have a separate business running from my home address - .
didnt you get done for that and your red light bulb taken away ;D ;D ;D ;D ;D ;D
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Their argument is that they aren't free consultants.
Which is a horrendous attitude to take when you think about it.
Not really, it's a very specialist area. It's unrealistic to expect HMRC to have loads of very highly specialized staff to advise on every dodge we can think of. Take professional advise, pay for it and bobs your uncle.
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I have a separate business running from my home address - .
didnt you get done for that and your red light bulb taken away ;D ;D ;D ;D ;D ;D
No I replaced it with a blue one and the poacher became a gamekeeper. :D
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Not really, it's a very specialist area. It's unrealistic to expect HMRC to have loads of very highly specialized staff to advise on every dodge we can think of. Take professional advise, pay for it and bobs your uncle.
So HMRC have an overly complicated taxing system > they expect you to implement for them > collecting taxes on their behalf > if you get it wrong you can be jailed > if you ask them for advice on how to implement it they refuse.
Bob can keep his greasy mitts of my aunt.
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Oi m8 some people think it’s a milestone when they get to the point they are collecting Vat for Rishi,don’t you go knocking em lol.
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Not really, it's a very specialist area. It's unrealistic to expect HMRC to have loads of very highly specialized staff to advise on every dodge we can think of. Take professional advise, pay for it and bobs your uncle.
So HMRC have an overly complicated taxing system > they expect you to implement for them > collecting taxes on their behalf > if you get it wrong you can be jailed > if you ask them for advice on how to implement it they refuse.
Bob can keep his greasy mitts of my aunt.
I messed up our first VAT return. They talked me through it and all sorted. That’s about as much as I’d expect and general guidance. I don’t think it’s fair to expect them to tell you which VAT dodge they’d accept and which they wouldn’t. As said above, it’s very specialist advice.
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Tax dodges shouldn't exist.
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Not really, it's a very specialist area. It's unrealistic to expect HMRC to have loads of very highly specialized staff to advise on every dodge we can think of. Take professional advise, pay for it and bobs your uncle.
So HMRC have an overly complicated taxing system > they expect you to implement for them > collecting taxes on their behalf > if you get it wrong you can be jailed > if you ask them for advice on how to implement it they refuse.
Bob can keep his greasy mitts of my aunt.
I messed up our first VAT return. They talked me through it and all sorted. That’s about as much as I’d expect and general guidance. I don’t think it’s fair to expect them to tell you which VAT dodge they’d accept and which they wouldn’t. As said above, it’s very specialist advice.
I think the point of my OP has been misconstrued slightly. I already have a franchise set up and this is the route I wish to go down in terms of growing the business. My thought was, if I were to set up another franchise, why not let that person be my wife as apposed to someone else? Nothing to do with tax dodging or Vat avoidance, as going Vat registered is something that I have no interest in doing either way. Anyway, thanks for the replies
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Why not let that person be my wife?,because in the eyes of the Vat man it just looks like your naming her for Tax purposes.
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Not really, it's a very specialist area. It's unrealistic to expect HMRC to have loads of very highly specialized staff to advise on every dodge we can think of. Take professional advise, pay for it and bobs your uncle.
So HMRC have an overly complicated taxing system > they expect you to implement for them > collecting taxes on their behalf > if you get it wrong you can be jailed > if you ask them for advice on how to implement it they refuse.
Bob can keep his greasy mitts of my aunt.
I messed up our first VAT return. They talked me through it and all sorted. That’s about as much as I’d expect and general guidance. I don’t think it’s fair to expect them to tell you which VAT dodge they’d accept and which they wouldn’t. As said above, it’s very specialist advice.
I think the point of my OP has been misconstrued slightly. I already have a franchise set up and this is the route I wish to go down in terms of growing the business. My thought was, if I were to set up another franchise, why not let that person be my wife as apposed to someone else? Nothing to do with tax dodging or Vat avoidance, as going Vat registered is something that I have no interest in doing either way. Anyway, thanks for the replies
You said you wanted your wife to do it to stay under the VAT threshold. :D
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Not really, it's a very specialist area. It's unrealistic to expect HMRC to have loads of very highly specialized staff to advise on every dodge we can think of. Take professional advise, pay for it and bobs your uncle.
So HMRC have an overly complicated taxing system > they expect you to implement for them > collecting taxes on their behalf > if you get it wrong you can be jailed > if you ask them for advice on how to implement it they refuse.
Bob can keep his greasy mitts of my aunt.
I messed up our first VAT return. They talked me through it and all sorted. That’s about as much as I’d expect and general guidance. I don’t think it’s fair to expect them to tell you which VAT dodge they’d accept and which they wouldn’t. As said above, it’s very specialist advice.
I think the point of my OP has been misconstrued slightly. I already have a franchise set up and this is the route I wish to go down in terms of growing the business. My thought was, if I were to set up another franchise, why not let that person be my wife as apposed to someone else? Nothing to do with tax dodging or Vat avoidance, as going Vat registered is something that I have no interest in doing either way. Anyway, thanks for the replies
You said you wanted your wife to do it to stay under the VAT threshold. :D
No, you didn’t read it properly. Never mind
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I currently run my own window cleaning business and I also have 1 franchise set up. My turnover is currently just below the Vat threshold and I don’t wish to go above it. Would it be possible for my wife to buy a franchise from my company if it is run as a completely separate business? Obviously this would be a great way to increase the family income and it would mean my business still remaining below the vat threshold. It also would mean I have not deliberately split the business to avoid Vat as my company and my wife’s franchise would be a completely separate business. Anybody done anything similar? It’s very hard to get any advice online. I asked my accountant and he isn’t sure either.
Seems pretty clear to me what your asking - maybe you just don’t like the answer