VAT issue query

LynWest Registered Posts: 122 🎆 🐘 🎆
Hi all, i have a bookkeeping client who has two different businesses both as a sole trader! One is Boating Holidays and the other is an Childrens Entertainment Agency. I thought that if both businesses were separate and not linked in the type of business that they did, then they both didn't have to be registered if one was below the threshold. THe holiday one definately exceeds it and is registered, but my clients accountant has registered both under my clients name. The other business only turns over about £20,000 and this now makes being competitive quite hard!

I queried it with another accountant who said that it is a grey area and to contact HMRC.

Does anyone know please? :)


  • Newbie
    Newbie Registered Posts: 229 🎆 🐘 🎆
    Read the hmrc guidance on artificial separation and decide based on the facts, there are a number of factors to account for.
  • LynWest
    LynWest Registered Posts: 122 🎆 🐘 🎆
    Thanks Newbie :)
  • groundy
    groundy Registered Posts: 495
    If the both businesses are a sole trader then they both become VAT registered as it is the individual who is VAT registered. The only way to avoid both businesses from having to register is to make one of the sole traders a partnership or Limited company. Although as Newbie mentions you would have to check if there is any artificial seperation.
  • deanshepherd
    deanshepherd Registered Posts: 1,809
    Don't think you are going to face an artificial separation issue. Boating Holidays and Childrens Entertainment Agency aren't exactly similar but I agree with the above, the registration relates to the individual, not his business(es).
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