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ONE BUSINESS OR TWO FOR VAT
A recent VAT Tribunal had to decide whether two hairdressing businesses should be treated as a single business for the purposes of VAT registration.
The distinction was critical as the two separate businesses were operating below the registration limit (currently £85,000) and the combined operation would have exceeded the limit meaning that VAT would need to be charged.
Note that HMRC have been successful in a number of cases aggregating the turnover of two businesses carried on by the same person(s).
However in this recent case it was established that the couple had never intended to run a single business in partnership. There was also physical separation of the premises, separate of clientele, different stylists worked for each salon and separate books were kept.
Note that where the same person carries on several businesses, the combined turnover of all of those businesses need to be considered in deciding whether or not the VAT registration threshold is exceeded.
Our proactive accountancy services aim to boost your bottom line, maximise taxation savings and ensure all your accounting and tax compliance matters are kept fully up to date. We can help you to make the right decisions now and for the future.
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LB Group has been helping both business and personal clients manage their financial affairs for more than 50 years. Our partners take a hands-on role by maintaining regular communication and as a client you will have direct telephone and email access to partners, allowing instant access to professional advice, information, or just to bounce ideas off.
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