[Jack Judd]

Loved the post on BIG business and how do we go big.  They appeared to be opposite ends of a spectrum.  I agree work life balance is so important.  My dad is a millionaire, probably multi but I never saw him and have a crap relationship with him now.  I have a autistic son which takes up time and energy, but I have also been knocking on the VAT door for 2 years.  Covid kept me under this year with time off etc, but I cant add more comercial customers without going over.  I dont want the hassel of running a 200k profit business, but I would like to run a 60k profit business rather than the current 45K proffit.  Can I split gutter cleaning and window cleaning or commercial and domestic to take the VAT pressure off.  2 ltd companies, 1 ltd and 1 solet trader 2 sole traders.   if you are going to go VAT registered how much more than the 85k do you need to make to make it worth while.   arrrrrrrrrrrr

[Ched]

Best to ask a decent accountant.

I think that the businesses have to be 2 completely separate and maybe even unrelated businesses.

I would be especially careful as HMRC will be doing their best to stop any sort of iffy behavior to claw back some of the gov expenditure due to covid!

[Spruce]

Best to ask a decent accountant.

I think that the businesses have to be 2 completely separate and maybe even unrelated businesses.

I would be especially careful as HMRC will be doing their best to stop any sort of iffy behavior to claw back some of the gov expenditure due to covid!

I agree. HMRC will see this as a tax avoidance scheme . They will see it exactly as the o/p is - a tax fiddle.
Its a question that has been raised before on this forum.

You might be able to get away with say a family member running the commercal business  side under a different name, from different premises and a different bank account.  As Ched says, you need to enlist the services of an accountant.

[NWH]

You are not allowed to have anything to do with one of the businesses.

[High-Tower]

It sounds like you need to reduce your expenses?
If you are making £45k and nearing the vat threshold, what’re you spending £35-40k on? Or are you talking take home after tax?
I should think £60k pretax profit and staying under the threshold should be achievable.

[Jack Judd]

Your right.  My cost are to high.  But I had 2 guys working for me and I was in the office 20% of the time generating business.  That worked as the business grew quickly, but meant I was on 50% costs, heated water, labour etc.  Saving my back and tennis elbow but financially worse off.     I think lower costs would be a way forward, but then i will have to pay more tax!!!

[High-Tower]

Are you still employing? and do you plan to continue employing in the future? If you do it sounds like you need to bite the bullet and go VAT registered, you might be able to use the flat rate scheme to soften the blow while your business adjusts.
Otherwise if you are working alone cut down the expenses streamline your work and perhaps focus on just one area rather than spreading yourself across commercial & domestics & gutters & etc.
It’s a false economy to spend money on your business just to reduce your tax bill, if it’s unnecessary spending it’s still not going in your pocket.

[Stoots]

No is the short answer.

Because HMRC will ask, why did you split them, do you have any commercially viable reasons?

Umm no, just to Avoid vat 

[NWH]

You can’t have anything to do with one of the businesses I’ve already talked to an accountant about this,IMO if you employ especially in the south there’s something seriously wrong if just 2 people out in 1 van aren’t going over the threshold if they work a 7-8 hour day.
10-15 years ago you’d easily stay under it people used cash way more than they do now.

[NWH]

I was told you must have no contribution at all to the other business in any way that it functions.

[NWH]

Go to 1 of the car washes pay one of em a couple of grand for their ID set up a business the 2 grand will seem like peanuts 🤣🤣,you won’t be the first to be doing it.

[TomCrowther]

Legally you can’t do this but I know people who do and have done so for years. Problem is when the tax man finally catches you and he will, you have all those years of “unpaid tax” to pay and they ain’t patient.

[AuRavelling79]

Those that have broken through the vat threshold successfully and tell about it seem to power through it by biting the bullet.

It's not like you lose 20% because you can claim some vat back.

[Stoots]

I was told you must have no contribution at all to the other business in any way that it functions.

Pretty much, there need to be no link from one to the other. Whilst technically you can do it, to be able to achieve it in reality would be impossible.

You cant share anything, not even a pen or a swivel chair.

The only way you can do it is if you prove its for commercial reasons, so maybe if you had 1 company down south and another up north, one being window cleaning another being gutter cleaning with separate staff, websites, customer bases etc you might be able to do it.

But again it's so dodgy, if a customer from business A puts you into a job that you complete via business B, there's a link and would be so hard to pull off you would spend all your time worrying about artificial separation.

[NWH]

It’s being done all over the place you have a business that needs work to be carried out it gets carried out by the other said business,1 generates work for the other and then invoices the other it goes on and has been since the year   ........ it’s illegal but so is armed robbery it won’t stop it happening.

[Stoots]

It’s being done all over the place you have a business that needs work to be carried out it gets carried out by the other said business,1 generates work for the other and then invoices the other it goes on and has been since the year   ........ it’s illegal but so is armed robbery it won’t stop it happening.

Theres all sorts of dodges that go on when it comes to tax a lot of it will be walking a thin line between whats legal and what isnt...from big corporations to the sole trader sticking a tenner in his back pocket.

Doesnt mean tax evasion is advisable though, personally i couldnt sleep at night wondering when the tax man was going to come knocking.

[NWH]

Buy a block of flats convert it into an office stay there 5 years get tax relieve through having it as business premises let the businesss pay the mortgage convert it back jobs a good”n” lol,loophole crazy country we live in if you actually said what you were intending on doing long term they wouldn’t allow it that’s the mad thing 🤣🤣

[Stoots]

Buy a block of flats convert it into an office stay there 5 years get tax relieve through having it as business premises let the businesss pay the mortgage convert it back jobs a good”n” lol,loophole crazy country we live in if you actually said what you were intending on doing long term they wouldn’t allow it that’s the mad thing 🤣🤣

Thats how the rich get richer, they dont give their money away easily.

[Kev Martin]

Loved the post on BIG business and how do we go big.  They appeared to be opposite ends of a spectrum.  I agree work life balance is so important.  My dad is a millionaire, probably multi but I never saw him and have a crap relationship with him now.  I have a autistic son which takes up time and energy, but I have also been knocking on the VAT door for 2 years.  Covid kept me under this year with time off etc, but I cant add more comercial customers without going over.  I dont want the hassel of running a 200k profit business, but I would like to run a 60k profit business rather than the current 45K proffit.  Can I split gutter cleaning and window cleaning or commercial and domestic to take the VAT pressure off.  2 ltd companies, 1 ltd and 1 solet trader 2 sole traders.   if you are going to go VAT registered how much more than the 85k do you need to make to make it worth while.   arrrrrrrrrrrr

Why try and avoid VAT?  If you are running a VAT Registered business and paying VAT every quarter you are making money, it is that simple.  Nobody appreciates being a mini tax collector for HMRC but that’s just the way it is.  My advice is stop worrying about it, register for VAT and get on with the important things in life like looking after your Son.  After all if  You find out later it was the wrong move you can always deregister!

[Ched]

Loved the post on BIG business and how do we go big.  They appeared to be opposite ends of a spectrum.  I agree work life balance is so important.  My dad is a millionaire, probably multi but I never saw him and have a crap relationship with him now.  I have a autistic son which takes up time and energy, but I have also been knocking on the VAT door for 2 years.  Covid kept me under this year with time off etc, but I cant add more comercial customers without going over.  I dont want the hassel of running a 200k profit business, but I would like to run a 60k profit business rather than the current 45K proffit.  Can I split gutter cleaning and window cleaning or commercial and domestic to take the VAT pressure off.  2 ltd companies, 1 ltd and 1 solet trader 2 sole traders.   if you are going to go VAT registered how much more than the 85k do you need to make to make it worth while.   arrrrrrrrrrrr

Why try and avoid VAT?  If you are running a VAT Registered business and paying VAT every quarter you are making money, it is that simple.  Nobody appreciates being a mini tax collector for HMRC but that’s just the way it is.  My advice is stop worrying about it, register for VAT and get on with the important things in life like looking after your Son.  After all if  You find out later it was the wrong move you can always deregister!

The problem is domestic customers will suddenly be paying 20%  more! So you might loose some!