End of business and change of primary activites

[Scubadog]

Well, the time has finally come for me to decide that I have had enough, and to cease trading.
My business turned over £150K in the last year and made enough to pay myself.
However, the stress and poor cashflow, coupled with an offer for employment means i have decided to end it.

I have a directors loan in credit to around £75K that the business owes me.
We have paid all creditors and have a few assets left that equate to around £20K.

What we would like to do is to change the business activities, name and its SIC code to one of agricultural.
This "new" business activities will be agricultural, and i forecast will achieve the following:
Yr £7K turnover no profit
Yr2 £12K turnover, £4k profit
Yr3 £12K turnover, £5k profit

My 2 questions are as follows, and this is just me trying to understand options before i speak to my accountant:

1) Is it acceptable to change the business activities, name and SIC code and continue to trade to hopefully allow me to extract the directors loan?

2) The current business is VAT registered. The new activities are entirely zero rated VAT on sales (food and livestock), with some VAT being recovered on input costs and assets. This will likely result in our quarterly VAT returns being either zero or with a rebate due from HMRC. Is this likely to cause any issues? My preference would be to remain VAT registered in order to reduce the input costs on some raw materials and assets.

Any input would be appreciated

 

[HFE Signs]

Before you do anything, can you sell your current trade out of your business to a competitor? If they can spend £x to bolt on £150k turnover onto their business it might be quite attractive to them.

 

[Socio South West]

I would second @HFE Signs suggestion there.

Just about every farming business in the land is a net reclaimer, and the VAT office are quite used to it. Before I escaped that sector in the 90s the only VATable output was wool which was worth a few quid then before the Chinese quit the world market in favour of synthetic fabrics and wool became worthless.

Best of luck with the new venture. As my father was always advised in his early days ' If you have livestock you also get dead stock' - Be prepared for a few knocks along the way.

 

[NickZ]

wool became worthless.

Wool being worthless?
Apple has shown us that with good marketing you can sell fridges to Innuit (Eskimos)

 

[Socio South West]

Wool being worthless?
Apple has shown us that with good marketing you can sell fridges to Innuit (Eskimos)

Wool price history.... https://www.statista.com/statistics/412379/wool-clip-output-price-index-united-kingdom-uk/

Part of the problem is that the wool is only about 3-5% of the value of the rest of the sheep..... The 95% goes rather well with mint sauce

As with many things agricultural, the marketing is out of the hands of individual farmers - its all sold to the Wool Marketing Board who hold (I think they are still held) auctions at their depots.

 

[DanteMosley]

Yes, you can change what your business does, its name, and its official industry code. This is a normal thing to do when you want your business to go in a new direction. You'll need to tell the right authorities, like Companies House in the UK, and update your business's registration with these changes. Doing this can help you shift your business focus and might even help you get back the money the business owes you. Just make sure all these updates are correctly made in your official paperwork.

 

[NickZ]

As with many things agricultural, the marketing is out of the hands of individual farmers - its all sold to the Wool Marketing Board who hold (I think they are still held) auctions at their depots.

They just need someone to do the marketing for them.
Its all about presentation. If those farmers have to create a brand so be it.
Brother up with a socks company and they are good to go.