Trading Sole Trader & Limited Company

Sion

Hi

Just a quick question, does anyone have any advice on a question ive received asking whether a person could trade as self employed and as a director in a company doing the same work.

Basically, the thinking is to invoice smaller jobs through the sole trader business which wouldnt be VAT registered and bigger jobs through the limited company which is VAT registered.

Any advice welcome,
Thank you

T.C.

Sounds like VAT avoidance - not a good idea if that is the case!

Sion

Ok, thanks

stefanboro

Agreed with TC

This would be an artificial segregation of business activities and is known as disaggregation for VAT puroposes.

More info can be found here:

http://www.hmrc.gov.uk/manuals/v1-28part2bsect63-93.pdf

And here:

http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageExcise_ShowContent&id=HMCE_CL_000086&propertyType=document

I think most accountants would have had a client try this on at least once - either that or I just get dodgey clients?

LynWest

This definately sounds like VAT avoidance.

peaman

Yes, stefanboro is correct, it is an artificial separation of business.

However, this does not stop the accounting practice that I work in doing just that and getting away with it for over 20yrs!!

And they have just had a VAT inspection and HMRC didn't spot it, although that doesn't really surprise me.

Fireraiser

Look what has just come into my inbox :ohmy:

http://www.choose-your-accountant.co.uk/view-ad/13503/business-accountant/sole-trader/swansea/?q=3519%7Ccad663226f007dcf86321bb80bdd506a

Needless to say, I won't be tendering for this!

I'm not a member of the FSB, but I can't believe they would actually give such advice. Does anyone have any dealings with them?

jenny3549

Fireraiser wrote: »

Look what has just come into my inbox :ohmy:

http://www.choose-your-accountant.co.uk/view-ad/13503/business-accountant/sole-trader/swansea/?q=3519%7Ccad663226f007dcf86321bb80bdd506a

Needless to say, I won't be tendering for this!

I'm not a member of the FSB, but I can't believe they would actually give such advice. Does anyone have any dealings with them?

Ooh, cringed when I saw Swansea - but they are Ystradgynlais so a bit out in the boonies!

Can't believe they would put up an ad like that, wonder if they had any takers!

Monsoon

Fireraiser wrote: »

Look what has just come into my inbox :ohmy:

http://www.choose-your-accountant.co.uk/view-ad/13503/business-accountant/sole-trader/swansea/?q=3519%7Ccad663226f007dcf86321bb80bdd506a

HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA

Oh well, at least he's honest about it!!!!

Fireraiser

I really shouldn't have googled "locksmiths SA9" and "window cleaners SA9". If I were to suggest to HMRC that they might like to take a look at this ad, I'm sure they would make the same Choice discovery that I did

I award this gent (like Monsoon, I'm assuming it's abloke) 0/10 for intelligence