Any reccomendations on VAT planning consultants

[Zeb Buzz]

Hi all

looking for some referrals for VAT planning and how HMRC views companies with common ownership but unrelated loations, management etc for overall VAT threshold.

Cheers, Z

 

[UK Contractor Accountant]

It's quite simply really - were the two entities established to avoid vat registration? If yes then the set up fails.

In all likelihood the vat threshold will be reduced in the coming years- the UK is the highest in Europe. Plus funds to pay for Covid measures are needed.

 

[WaveJumper]

Be worth talking to your accountants but I thought the rules were quite clear to be honest. I am sure the resident forums accountants will soon respond with their views and advice on the topic

The Key Question
The following question is the key one considered in the VAT Tribunals:

“Are the businesses closely bound by financial, economic and organisational links?”

Separation of structure has also featured in cases.

Financial Links
·Are the businesses operating independent of financial support from one to the other?
·Would they both be financially viable without support from one another?
·Have they got separate pools of income, distinct from one another?

Economic Links
·Are the two businesses seeking to realise separate economic objectives?
·Is there no mutual benefit to each business from the activities of the other?
·Are they supplying different customers? (and not simply VAT-registered versus not-registered customers)

Organisational Links
·Are there two separate legal entities?
·Is there a genuine commercial reason for the separate businesses?
·Do the businesses have separate management?
·Do they have separate employees?

Structural Separation
·Are there separate bank accounts?
·Are separate year-end accounts being prepared?
·Is there separate advertising and marketing?
·Are there separate phone numbers, e-mails, trading styles, logos, signage?
·Are there separate premises - or at least separate floor space usage?