Small business rate relief on two Ltd co's?

[Sunny Days]

Hi

We receive small business rate relief for our salon. If we opened a second salon, could we open a second Ltd co. so we wouldn't pay business rates on the salons (as I think we'd have to pay them on both salons if it was the same company).

Or do the council have their own rules and count it as one business as there would be the same director in both and both would have the same trading name?

Many thanks

 

[kulture]

The law cannot be changed by the council. Each company has to be a separate legal entity. Sharing a director does not preclude this. As such a council HAS to follow the law and grant small business relief on each separate business.

 

[obscure]

The law cannot be changed by the council. Each company has to be a separate legal entity. Sharing a director does not preclude this. As such a council HAS to follow the law and grant small business relief on each separate business.

While I expect you are right, how is it that the VAT man can decide that two separate companies are actually one company slit in two for the purpose of avoiding reaching the VAT threshold.

 

[pentel]

Might be worth checking if the cost of preparing 2 sets of limited company accounts exceeds the amount saved in rates.

 

[kulture]

While I expect you are right, how is it that the VAT man can decide that two separate companies are actually one company slit in two for the purpose of avoiding reaching the VAT threshold.

Good question. But I suspect that as HMRC make the laws and as this is money they can collect they have written the law in such a way that they can maximise the tax collected. I suspect that they don't care so much for local council tax collections.