Vat and partnerships!

[MooresFT]

I am throwing this out there incase anyone is in the same boat and knows the answers!

 

So I am VAT registered as a soletrader, my business is fencing.

 

This year me and a friend have started a firewood business.

 

He is part of a partnership, a farm, which is VAT registered.

 

so basically we are both VAT registered for different business's, but now want to start another business/partnership between us. How do you handle Tax / Vat?

 

anyone got the same?

 

Thanks in advanced.

[Steve Bullman]

Why not go limited? Sole trader means just that doesn't it?

[Richard 1234]

Just register as a partnership/LTD and got VAT as and when needed. I would probably go LTD straight away to distance myself from it a bit.

And VAT as soon as it makes sense.

[timbernut]

If it's a firewood business wouldn't it make sense to go VAT reg straight away especially if your buyin cord in?

Bein as you only charging customers 5%

[gdh]

With firewood it's worth getting vat straight away as you buy in at 20% and sell at 5%. I can't see that vat will be too complicated for you as it's the business that pays not the individual. I'm in a similar position and don't have any problems but that could because I don't make enough money.

[Duffryn]

I am throwing this out there incase anyone is in the same boat and knows the answers!

 

So I am VAT registered as a soletrader, my business is fencing.

 

This year me and a friend have started a firewood business.

 

He is part of a partnership, a farm, which is VAT registered.

 

so basically we are both VAT registered for different business's, but now want to start another business/partnership between us. How do you handle Tax / Vat?

 

anyone got the same?

 

Thanks in advanced.

 

A couple of questions in order to be able to help :-

 

1) Do you want to be vat registered in the new business ?

 

2) Is the new business the same "trade" or a closely related trade to the trade that as either of you currently trade in ?

[MooresFT]

Answer 1) Yup we are happy to VAT register

2) Depends what you call close, I am a fencing contractor and friend is a farmer.

 

Thats what we figured, go LTD for the firewood and VAT register.

 

I was wondering how that would work for me tho, as my fencing is a soletrader business, do i need to go LTD with the fencing side of things aswel?

[Richard 1234]

Answer 1) Yup we are happy to VAT register

2) Depends what you call close, I am a fencing contractor and friend is a farmer.

 

Thats what we figured, go LTD for the firewood and VAT register.

 

I was wondering how that would work for me tho, as my fencing is a soletrader business, do i need to go LTD with the fencing side of things aswel?

 

 

I think you can just stay as you are with the other stuff.

Worth checking it's not classed as too close in nature to either of your business's

[Justme]

If it's a firewood business wouldn't it make sense to go VAT reg straight away especially if your buyin cord in?

Bein as you only charging customers 5%

 

 

Yes it would.

[Duffryn]

Answer 1) Yup we are happy to VAT register

2) Depends what you call close, I am a fencing contractor and friend is a farmer.

 

Thats what we figured, go LTD for the firewood and VAT register.

 

I was wondering how that would work for me tho, as my fencing is a soletrader business, do i need to go LTD with the fencing side of things aswel?

 

VAT and Ltd are too separate issues. On the VAT front I would say that HMRC would consider this a linked trade in which case you will need to apply for a new VAT number as a partnership. If your intended business is firewood this is a no brainer anyway, reclaim 20% charge 5% ( in most cases).

 

On the LTD front there are two issues here. Liability and tax. If your business is firewood, you have full PL/ PI insurance, you are no intending to borrow or build up big creditors, then the liability issue is a mute one. On the tax side without knowing a great deal more I couldn't advise but I would hazard a guess that you would probably be better off as a partnership rather than a LTD business.