Need some advice

[iffy]

Aside from research I have started, I need advice on how to grow and manage my businesses.

SCENARIO
Two and a half years ago I bought a post office which is doing well. I have a small stationery/gift business that runs alongside the post office that turns over around 30k per year. Now recently I started a secondary business letting rooms and flats for Landlords. This business obviously has a greater turn over and as a result is bringing me close to the VAT threshold. Both businesses are set-up as a sole trader business with different business names and bank accounts.

SITUATION
I now wish to work a little more and drive a taxi. Doing this will definitely push me over the VAT threshold and I do as well want to grow both the the property business and the retail side of my post office.

What advice can you give to some in my position? Can I legally have all businesses separate so that all business have their separate VAT threshold of the 85k? If not what should I look to research in to?

I would also like to purchase a vehicle through the business/es, what would again be the best approach to this?

Lastly, I want to employ staff for the post office business. I already have a staff member on around 23k and would like to employ someone part time. Would tax due from all businesses go against the 10k odd tax free income for the new member of staff

 

[Mr D]

What tax free income for new member of staff?

 

[iffy]

What tax free income for new member of staff?

Sorry - I meant the new employees first 10k paid would be deducted against my tax accrued over the financial year?

 

[Newchodge]

Unless the businesses are run through limited companies they are all your personal income and rapidly approaching the VAT threshold, meaning all will need to be VAT registered, as far as I understand. I suggest you need to get some serious, paid for, accountancy advice before you drop yourself deep in the doo doo.

If yoy employ a member of staff they will have a tax free allowance. That means their income up to that tax free allowance is free of tax. THEY do not have to pay tax. It has NOTHING to do with your tax position.

Please see an accountant.

 

[STDFR33]

‘Iffy’.
There was never a name so apt.

Sit down with someone and get some proper advice.

 

[Mr D]

Sorry - I meant the new employees first 10k paid would be deducted against my tax accrued over the financial year?

Not a clue what that is. Can you clarify?

 

[iffy]

I have an accountant whom is bad at his job and to be honest; should be struck off. I am in the process of changing accountants at this moment in time but until then and in addition, I deem it best to gain more knowledge in this area as well paying for the advice.

So my understanding was as follows:
I have two employees each on let's say 15,000 salary. For the current tax year my tax bill is 20,000. According to me - 10,000 of each employees salary is deducted against my tax first and the rest of the 5,000 for each employee comes from my profit.
In effect this means I have no tax to pay for that current year?

 

[Mark T Jones]

So my understanding was as follows:
I have two employees each on let's say 15,000 salary. For the current tax year my tax bill is 20,000. According to me - 10,000 of each employees salary is deducted against my tax first and the rest of the 5,000 for each employee comes from my profit.
In effect this means I have no tax to pay for that current year?

I might be missing something, but this makes no sense whatsoever to me.

Re VAT It depends how interlinked the businesses are. You can almost certainly separate out the taxi business. Less likely that you can separate the Post Office and gift business

 

[MartinCivil]

So my understanding was as follows:
I have two employees each on let's say 15,000 salary. For the current tax year my tax bill is 20,000. According to me - 10,000 of each employees salary is deducted against my tax first and the rest of the 5,000 for each employee comes from my profit.
In effect this means I have no tax to pay for that current year?

This makes no sense at all, your accountant may be no good but he must be able to inform you on something as basic as this.

Your tax bill will have been worked out taking into account your income and expenses, your £30k wages bill is an expense and so presumably has already been taken into consideration

I'm intrigued how you have managed to rack up a £20k tax bill while keeping your turnover below the VAT threshold

 

[Matthew1982]

Here's an example to try to make this as simple as possible:

Turnover: £50,000 (all income from all businesses)
Allowable Expenses: £30,000 (wages, stock, etc.)
Taxable Profit = £20,000 (turnover minus expenses)

You would then take your personal allowance from this figure which was £11,000 last year, this leaves you with the amount you would actually pay tax on.

In this massively over simplified example you would pay 20% tax on £9,000 so your actual tax amount to pay would be £1,800.

Obviously there is National Insurance too and many other things to discuss but you clearly need to seek paid for advice quickly as this is all rather basic.

 

[STDFR33]

I might be missing something, but this makes no sense whatsoever to me.

Re VAT It depends how interlinked the businesses are. You can almost certainly separate out the taxi business. Less likely that you can separate the Post Office and gift business

The OP is a sole trader.

They can have one or ten thousand businesses. The turnover of each business will be added together for the purposes of VAT registration. They can not be separated for VAT purposes.

OP - I have no idea what you are talking about in regards to your employees.
They have a personal allowance, you don't get their personal allowance.

 

[Matthew1982]

Another point to add is that if you are working as a letting agent I presume that you are dealing with tenancy agreements, deposit protections, identity and residency checks, etc?

If you are doing this as a sole trader you should really have professional indemnity insurance at the very least, personally I would be operating this as a limited company especially with the amount of legislation involved.

Do you make sure all the properties that you let have gas safety certificates renewed annually and valid EPC's available before marketing, are you a member of a redress scheme such as PRS which is now a legal obligation?

 

[Dory]

My understanding of VAT threshold with multiple businesses is - you do not have to add together if they are separate businesses run from separate address in separate field of business. So the post office and gifts are one business as in same premises and one relies on other. The taxi business is separate if run from another address, ie from home.

 

[STDFR33]

My understanding of VAT threshold with multiple businesses is - you do not have to add together if they are separate businesses run from separate address in separate field of business. So the post office and gifts are one business as in same premises and one relies on other. The taxi business is separate if run from another address, ie from home.

That's rubbish.