I am looking into taking on more commersial contracts and, I know this may have already been covered, I need some advice on voluntary VAT.
As far as I can see I have three choices:
1 stay as I am as domestic customers dont want to pay VAT.
2 Split the business in two and register the commercial side for VAT.
3 Keep the business whole and bite the bullet hoping not to annoy the domestic clients.

I just cant make up my mind any help would be much appreciated.

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Number 2 looks the best idea to me, i recently had a conversation with my accountant who suggested something similar
I can't see a problem running two seperate business' as long as the combined turnover is below the VAT threshold.
I not sure you can do no. 2 if you are Self Employed/Trading As even if it is a voluntary registration ?

I was told HMRC will treat income from any source as 'one' (and therefore would be assessed via a single self assessment form), thus potentially pushing you T/O above the vat threashold and thus registration required.

I understand it is possible if both business are Ltd companies are they are seperate entities, with seperate accounts (and costs...).

I am also sure there are some HMRC tax avoidance rules to stop you having, say, 10 companies all roughly in the same business sector and trying to keep each companies t/o below VAT threshold.

As they say; there are only two things certain in life - paying tax and death !!!
HMRC consider this as " artificial separation". May be worth taking a look at HMRC website "Statement of practice :artificial separation of business activities". You need to be very careful if you are going down this route, consult your accountant. The only upside is that if you get caught out the HMRC cannot recover retrospectively or so they say!!

http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebAp...

Cesare Harradine said:
I can't see a problem running two seperate business' as long as the combined turnover is below the VAT threshold.
My accountant has said all of that! you should go into accoutancy gary!!!

gary @ affinity landscapes said:
I not sure you can do no. 2 if you are Self Employed/Trading As even if it is a voluntary registration ?

I was told HMRC will treat income from any source as 'one' (and therefore would be assessed via a single self assessment form), thus potentially pushing you T/O above the vat threashold and thus registration required.

I understand it is possible if both business are Ltd companies are they are seperate entities, with seperate accounts (and costs...).

I am also sure there are some HMRC tax avoidance rules to stop you having, say, 10 companies all roughly in the same business sector and trying to keep each companies t/o below VAT threshold.

As they say; there are only two things certain in life - paying tax and death !!!

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