VAT when you have both limited and sole trader company

[Tara]

Hi

I am a sole trader for my design business and am about to go linited for my other business. As a sole trader I am VAT reg, but I would like my limited company not to be, is this possible?

Thanks

[Hayles]

Yep. I'm in the same situation.

As Alpha is always telling me, the Ltd company is an entity in its own right (see, I have been listening Alan!)

You would have to be VAT registered for any other business (another sole trader or partnership), if it wasn't a Ltd Co.

[Alpha]

So far what Hayles has said is quite correct.

The only provis that I would add is that if you have created the Limited company to do exactly the same work as the current sole trader business then HMRC will treat the formation as simply being done to avoid VAT, insist that they are both vat registered and collect the vat that should have been paid over (It would then be down to you to attemt to recover the vat form your customers)