Multiple e-commerce sites run by one company?

Discussion in 'Ecommerce Forum' started by Kavara, Aug 23, 2019.

  1. Kavara

    Kavara UKBF Newcomer Free Member

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    I run small LTD company with an E-commerce site. Would there be any issue if I set up a second E-commerce site that will sell completely different products from my LTD company E-commerce site?

    Currently my VAT rate is 5%, will this increase my VAT rate as well?
    Can i handle same gateway on both sites and paying same amount of VAT?
     
    Posted: Aug 23, 2019 By: Kavara Member since: Aug 23, 2019
    #1
  2. Mr D

    Mr D UKBF Legend Free Member

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    Yes not uncommon for different types of products to have different websites.
    Each catering to different customers.

    Is what your business classed as doing going to change that much regarding vat? Presuming you are talking about flat rate scheme.

    Your business will be the one collecting and handing over vat not the website.
     
    Posted: Aug 23, 2019 By: Mr D Member since: Feb 12, 2017
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  3. Kavara

    Kavara UKBF Newcomer Free Member

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    Yes that's idea - that's right, It's flat rate scheme.

    My main concern is payment gateway. To be able to use it i need company number.

    To be more specific, will i have issues if i use same company number for payment gateway on my second website that have different bank account and do i need to pay tax for that second E-commerce site as well?

    Or should i pay tax only for my registered company - in this case my running E-commerce site.

    Thank you for advice!
     
    Posted: Aug 23, 2019 By: Kavara Member since: Aug 23, 2019
    #3
  4. Mr D

    Mr D UKBF Legend Free Member

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    Vat would be on all the company relevant sales. If items are subject to vat then you charge buyers vat as normal.

    Not sure why you would have different bank account. Same company?

    Now if you were to set up a totally separate business to deal with other site, with no links to company, no sharing if resources and maybe different business type then maybe could claim to be separate for vat and therefore not subject to it as regards collection.
    Google vat artificial separation - the trick appears to get HMRC to accept there are no links.
     
    Posted: Aug 23, 2019 By: Mr D Member since: Feb 12, 2017
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  5. Scalloway

    Scalloway UKBF Legend Free Member

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    You either need to include all your sales in the company or set up a completely separate business for the other income stream.
     
    Posted: Aug 23, 2019 By: Scalloway Member since: Jun 6, 2010
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  6. Kavara

    Kavara UKBF Newcomer Free Member

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    Well mostly because my second E-commerce store would sell totally different niche of products then my company registered one.

    In different words, nature of business or SIC is completely different then my company registered one. And i don't want to increase my fixed VAT rate of 5%.

    To run a functional E-commerce store i just need a registered company for payment gateway right?
    By having different bank account for my second E-commerce store I would separate the income, in this case using Revolut bank.

    Like I said my main concern is payment gateway, will they make any problems if I use same company number for registration of payment gateway - or they just don't care?
    If they don't care in that point of view and get me approved, I won't need to pay VAT for that store?
     
    Last edited: Aug 23, 2019
    Posted: Aug 23, 2019 By: Kavara Member since: Aug 23, 2019
    #6
  7. Scalloway

    Scalloway UKBF Legend Free Member

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    What I would suggest is your company enters into a written agreement with you that it will accept payments through its payement gateway in return for a small fee.
     
    Posted: Aug 24, 2019 By: Scalloway Member since: Jun 6, 2010
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  8. Mr D

    Mr D UKBF Legend Free Member

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    So in other words you want a completely separate setup to not be linked for VAT purposes until such time as your business grows beyond ability to use flat rate scheme.

    You pay tax on your income. Your company pays tax on its profits.
    No getting round paying tax at some point.
     
    Posted: Aug 24, 2019 By: Mr D Member since: Feb 12, 2017
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  9. Kavara

    Kavara UKBF Newcomer Free Member

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    My registered company E-commerce would pay VAT of 5% flat rate.
    About income tax, your tax rate is 0% if you keep it below £12,500.

    So by running my second E-commerce store with separate setup, i will not link tax or income tax for that store. Only connection would be my company number that i enter when getting verified for payment gateway for my second store.

    For example:
    My first store is linked to PayPal gateway and PayPal is verified with my company details and linked to my company bank account. For this store i pay 5% VAT on all sales in my store.

    My second store is linked to PayPal gateway and my second PayPal account, my second PayPal account is also verified with my company details but linked to my Revoult bank. So i don't pay VAT for sales in this store.

    In this case i'm only worried if PayPal (gateway) in this example, would make any problem if i put same company number/details in 2 different PayPal accounts for verification purposes.
     
    Posted: Aug 24, 2019 By: Kavara Member since: Aug 23, 2019
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  10. Mr D

    Mr D UKBF Legend Free Member

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    Are your businesses are linked in any way? Will HMRC may see it as a method of evading VAT?
    That's what you have to take into account.

    It sounds like you are linking them.
     
    Posted: Aug 24, 2019 By: Mr D Member since: Feb 12, 2017
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  11. Scalloway

    Scalloway UKBF Legend Free Member

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    Remember that is all your income put together. So a sole trader business could make that amount of profit tax free only if you take no salary, dividends or loan interest from your limited company.
     
    Posted: Aug 24, 2019 By: Scalloway Member since: Jun 6, 2010
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  12. Kavara

    Kavara UKBF Newcomer Free Member

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    Only trough payment gateway (registration) - there is no other connection between that two E-commerce stores.

    I thought as part of personal allowance tax rate would be 0% if i keep it below £12,500 ?
    Any other suggestions how to keep low tax on E-commerce as accountant?
     
    Last edited: Aug 24, 2019
    Posted: Aug 24, 2019 By: Kavara Member since: Aug 23, 2019
    #12
  13. Mr D

    Mr D UKBF Legend Free Member

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    Personal tax rate is nil for first £12500 as you say. Dividends its £2k last I looked.

    Question becomes, will HMRC see the payment gateway as being sufficient link?
     
    Posted: Aug 24, 2019 By: Mr D Member since: Feb 12, 2017
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  14. Kavara

    Kavara UKBF Newcomer Free Member

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    That's my main concern. I think that completely depends on payment gateway and how they process registration. If they are not so strict and just ask for proof of company ownership, I can have two stores without problem.

    Do you know how payment gateways process registration and are they connected with HMRC in any way?
     
    Posted: Aug 24, 2019 By: Kavara Member since: Aug 23, 2019
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  15. Nochexman

    Nochexman UKBF Enthusiast Free Member

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    Yes, you can have two different businesses sharing the same payment processing arrangements. Lots of our merchants do this.
     
    Posted: Aug 27, 2019 By: Nochexman Member since: Jun 14, 2011
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  16. Kavara

    Kavara UKBF Newcomer Free Member

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    Thank you for answering.

    About payment gateways, for your approval they check and match entered registration details with government records.
     
    Posted: Aug 28, 2019 By: Kavara Member since: Aug 23, 2019
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  17. Nochexman

    Nochexman UKBF Enthusiast Free Member

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    In summary, I guess what we are interested in doing is establishing that the two websites are owned by the same entity. We don't usually need to check government records to establish this; the onus is on the websites owner to demonstrate this.
     
    Posted: Aug 29, 2019 By: Nochexman Member since: Jun 14, 2011
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  18. YPC2017

    YPC2017 UKBF Newcomer Free Member

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    Loads of e-commerce sites are just one company.
     
    Posted: Sep 15, 2019 By: YPC2017 Member since: Aug 8, 2017
    #18
  19. antropy

    antropy OpenCart Experts Full Member - Verified Business

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    A lot of ecommerce have more than one site but you need to make sure URL's are different as in June 2019 Google changed the limit to one/two results from one company url for the keyword searched upon. However as long as they are different (even by one letter) you will be absolutely fine. Alex
     
    Posted: Sep 16, 2019 By: antropy Member since: Aug 2, 2010
    #19