20-01-2013, 15:28
(This post was last modified: 20-01-2013, 15:28 by friendly accountant.)
Twelfth useful post....
If your income is nearing the VAT threshold limit, then some people may consider the possibility of setting up a Ltd Co and putting some of their business through that instead of reporting it as a sole trader. This avoiding the need to compulsory register for VAT.
Although a Ltd Co is a seperate legal entity from it's owners - HMRC can actually consider it to be one and the same in cases where they deem that a Ltd Co has been created to avoid VAT. They call it artificial seperation and will look at things like common control, advertising, funding, business etc.
If in doubt, ask first rather than just go ahead and do it.... HMRC know this happens and they are well and truly aware of it.
HMRC are not daft!
If your income is nearing the VAT threshold limit, then some people may consider the possibility of setting up a Ltd Co and putting some of their business through that instead of reporting it as a sole trader. This avoiding the need to compulsory register for VAT.
Although a Ltd Co is a seperate legal entity from it's owners - HMRC can actually consider it to be one and the same in cases where they deem that a Ltd Co has been created to avoid VAT. They call it artificial seperation and will look at things like common control, advertising, funding, business etc.
If in doubt, ask first rather than just go ahead and do it.... HMRC know this happens and they are well and truly aware of it.
HMRC are not daft!
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