Vat and partnerships!

[AardvarkTreeServices]

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?

 

Nowt wrong with you staying as a VAT registered soletrader as the Ltd co is a separate entity. Two sets of accounts to do. As your fencing work is VAT registered I cant see the VAT man being bothered how close the business activities are, because VAT is being collected on all sales. If your fencing wasnt VAT registered then VAT man is likely to be interested in how close the businesses are as you could be routing VATable work through the non VATable sole trading.

[MooresFT]

So when it comes to drawing some takings from the firewood business.

I can take these drawings into a personal account without paying vat on them? As I am VAT registered as a sole trader?

[AardvarkTreeServices]

No VAT due on salary or dividends drawn from a ltd co.

 

You will have sole trader accounts to do for the fencing and a personal tax return showing profit from fencing together with salary and dividends from the ltd co and any other income.

[Tom87]

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%

 

It would make complete sense going VAT registered, you get your 20% off your raw stock and only have to charge 5% on your end product. If you were having to charge 20% on the end product then it would be a different story.

 

Plus you can get your 20% back on expenses like fuel and machinery etc.

[MooresFT]

Sorry about the lack of reply, been having a nightmare with our internet supplier!

 

But thankyou for the replies! Much help.

 

Cheers