[mike1986]

Does anybody do this? For example ‘Mikes window cleaning domestic’ and ‘Mikes window cleaning commercial’? Would this be excepted as two separate companies so long as they have no shared assets etc?

[John Mart]

Why would you want to keep the commercial one below the VAT threshold? For the stress involved it may be better to be flat rate VAT and have the commercial subsidise the domestic if you have lots of commercial.

[deeege]

To do this you will need to use different equipment for each business. So different vans, poles, phones, computers for invoicing etc, workwear etc etc etc.

Any decent accountant will strongly advise against doing this, unless the business’ are completely separate entities ie business A is Window cleaning and Business B is painting and decorating.

[Matt.]

As Deegee says completely separate, and I think the tax man would get u by association of 2 companies

[windowswashed]

If the other company is registered in your partner's name and she is accountable for the tax

[Nick Day]

The only chance you have is to have two limited companies, and even then you would probably need to be a minor shareholder in both, but by the time you have worked out the accountants fees, corporation tax, NIC it  will,probably be a waste of time and money.

[easycleaner]

Running two business the same, don't do it the tax man will come down very hard and you could end up with a VAT bill and no one has paid you it.
Best ask the right people, accountant.
Mart

[Stoots]

Needs to be COMPLETELY seperate to be legal.

Different everything, staff, vans, equipment even the pen you write with lol.

Totally inadviseable, they will get you for artificial seperation unleaa you were ridiculously meticulous. It would be more effort to keep it legit than it would be worth.

Considered franchising?

[Soupy]

Franchise or take the hit.

Artificial separation of a business to avoid paying VAT is illegal. If they prove you've done that then you'll be hammered.

[Tom-01]

They can only make you VAT registered from the point you/they merge the two companies together - they cannot retrospectively charge you VAT if you've been trading as two different companies.

[Smudger]

I think everyone has covered this pretty well except Tom - it will be seen as tax avoidance so you’ll be up for fines as well as tax

As stated, even Sharing a pen is a no no - otherwise everyone here would have 12 companies a different one for each month of the year 😝

Darran

[Lee Pryor]

They can only make you VAT registered from the point you/they merge the two companies together - they cannot retrospectively charge you VAT if you've been trading as two different companies.

Wow!

No offence Tom but this is some of the worst advice I have ever seen on this forum!

To the person who started this thread, just run your business properly and pay the vat. I never understand the fear people seem to have with it. Just crack on, plenty of companies on here are vat registered.

[Tom-01]

They can only make you VAT registered from the point you/they merge the two companies together - they cannot retrospectively charge you VAT if you've been trading as two different companies.

Wow!

No offence Tom but this is some of the worst advice I have ever seen on this forum!

To the person who started this thread, just run your business properly and pay the vat. I never understand the fear people seem to have with it. Just crack on, plenty of companies on here are vat registered.

I didn't say he should do it. I merely stated that the VAT registration would start from the moment HMRC decided they were the same company.

[Tom-01]

"Even if 2 separate legal entities have been created, HMRC could still apply an aggregation ruling forcing the 2 entities to be treated as 1. As this is not retrospective there is no financial penalty when this is applied.

Regards

Paul Taylor
Senior VAT Consultant"

That's taken from accountingweb.co.uk

[Smudger]

1 Is HMRC likely to see these as separate?

NO. THERE ARE TOO MANY THINGS COMMON TO BOTH BUSINESSES: YOU, PROPERTY, ETC.

2)      If not:

a.      Are they likely to be able to retrospectively charge VAT

HMRC WILL TREAT THE SALES AS INCLUDING VAT

b.      If they retrospectively charge VAT, will they charge interest and at what rate

THERE WILL BE PENALTIES AND INTEREST


this from another VAT specialist accountant - so take your pick as to whether you will be safe or not,  basically unless your willing to pay a 'specialist' VAT accountant your not going to get a clear cut answer - however if the VAT man feels so inclined to think you have done this purely to avoid paying your dues then the penalties could be severe

Darran

[CleanClear]

"Even if 2 separate legal entities have been created, HMRC could still apply an aggregation ruling forcing the 2 entities to be treated as 1. As this is not retrospective there is no financial penalty when this is applied.

Regards

Paul Taylor
Senior VAT Consultant"

That's taken from accountingweb.co.uk

There's no context here for that quote. Someone could run two businesses window cleaning, and selling easter eggs on ebay..... the advice above might be sound for that scenario. Not what was asked.............

[Tom-01]

"Even if 2 separate legal entities have been created, HMRC could still apply an aggregation ruling forcing the 2 entities to be treated as 1. As this is not retrospective there is no financial penalty when this is applied.

Regards

Paul Taylor
Senior VAT Consultant"

That's taken from accountingweb.co.uk

There's no context here for that quote. Someone could run two businesses window cleaning, and selling easter eggs on ebay..... the advice above might be sound for that scenario. Not what was asked.............

It was in the context of artificial separation. As I said I wasn't advising the OP to do anything, just stating what I understand to be correct.

[Rogue Trader]

FIGHT

[Rogue Trader]

seriously tho. don't do it. any admin to avoid vat is not allowed and not difficult to spot. they will be all over it. don't waste your time and energy .