Home For accounting professionals General accounting discussion
Current updates regarding coronavirus (Covid-19) and the precautions AAT are taking will be continually updated on the below page.

Please check this link for the latest updates:
We hope you are all safe and well and if you need us we will be here. 💚

VAT registering - client has more than one business

LynWestLynWest Well-KnownRegistered Posts: 122
I have a client who has three sole trader businesses.
One is a sandwich shop, one is a house letting agency and another is a mailbox agency.
The sandwich shop is over two sites, the letting agency and mailbox agency are in offices above the one sandwich shop. If the combined total of the turnover is over the VAT threshold does she have to register?
I thought that since the businesses are unrelated as in they are clearly different trades. She clearly isn't splitting the businesses into three to avoid VAT registration and they are different trades. I spoke to one accountant that said it is the person that is registered if all their businesses total turnover reach the threshold. But i only thought this was the case if the trade was similar like a mechanic that had one business repairing cars and another that sold car parts. He is clearly splitting the business to avoid VAT, but not many people would expect to buy sandwiches when going to let a house.
Can someone please clarify for me?
Many thanks


  • groundygroundy Trusted Regular Registered Posts: 495
    If it is a sole trader then it is the individual who is registered and therefore all three would be liable for VAT. The only way to avoid this if they are genuinely individual businesses is to look at setting some up as Ltd Co or Pships. May be worth you seeking some proper VAT advice if you are unsure
  • LynWestLynWest Well-Known Registered Posts: 122
    Thanks Groundy
  • JodieRJodieR Experienced Mentor Registered Posts: 1,002
    yes, i agree with groundy. i had a client years ago who ran a proper business through the week and then did a couple of taxi-driving shifts on the weekend and wasn't impressed to hear that he had to include the taxi driving on his VAT return!
  • LynWestLynWest Well-Known Registered Posts: 122
    Thanks Jodie
  • LynWestLynWest Well-Known Registered Posts: 122
    Just to clarify then, if the cumulative reaches the threshold she could set up one business (most probably the sandwich shop as this has the most financial risk) as a Ltd company and then she would not have to pay VAT on any of the businesses. They are all genuinely separate businesses. Not many letting agents sell you a sandwich while you wait! I take it the Registration for the shop would then be in the companies name and therefore a separate entity. Thanks for all your help :thumbup1:
  • groundygroundy Trusted Regular Registered Posts: 495
    That's right if one of the businesses is Ltd it is a separate entity and therefore its sales are not part of the equation for VAT threshold. Are they run from separate premises with separate contact details? If so this shouldn't be a problem as its not an artificial separation.
  • LynWestLynWest Well-Known Registered Posts: 122
    There are two sandwich shops separate premises, then the letting agency and the fedex agency are run from offices above the one shop. So the letting agency's address would be 1st floor where the shop would just be number x road x. I understand that people try and separate businesses to avoid vat, but these are really different industries.
Sign In or Register to comment.