FRS VAT and "associated business?" as self employed

okchimken

Hi folks,

Your help/thoughts gratefully appreciated. I will try and be as accurate as possible, please bear with me if I use incorrect terminology here (there is a risk of that!).

So, I have been running a marketing agency for a number of years and it has been on FRS VAT for a good couple of years now. I am self employed, this is not a limited.

It is a particular niche of marketing, and I am keen to expand into a different niche, but it makes a lot of sense to create a new brand in this niche. I am planning to launch a new agency "brand". The operational, billing, address etc would be the same but brand name and the niche would be different. It would still operate within the same VAT business category for FRS purposes.

The question is: can I just set this up and combine both businesses for the purpose of FRS vat if within the threshold? I know there is some issue with associated businesses and having flat rate as a "group", but does this apply to a self employed person? I'm a bit confused. I do like FRS as it's extremely simple.

Hope this makes sense. With many thanks!

00ec25

okchimken wrote: »

Hi folks,

Your help/thoughts gratefully appreciated. I will try and be as accurate as possible, please bear with me if I use incorrect terminology here (there is a risk of that!).

So, I have been running a marketing agency for a number of years and it has been on FRS VAT for a good couple of years now. I am self employed, this is not a limited.

It is a particular niche of marketing, and I am keen to expand into a different niche, but it makes a lot of sense to create a new brand in this niche. I am planning to launch a new agency "brand". The operational, billing, address etc would be the same but brand name and the niche would be different. It would still operate within the same VAT business category for FRS purposes.

The question is: can I just set this up and combine both businesses for the purpose of FRS vat if within the threshold? I know there is some issue with associated businesses and having flat rate as a "group", but does this apply to a self employed person? I'm a bit confused. I do like FRS as it's extremely simple.

Hope this makes sense. With many thanks!

are you CERTAIN that you are using the correct flat rate?

Your activity of "marketing" does not sound like you will have qualifying expenditure to allow you to use the sector flat rate, so you are already required to use the Limited Cost Trader rate

you are not incorporated. Does not matter how many "brands" you use, there is only business: you and the VAT turnover is the total of all your sales.

As you flag, there are rules around associated bushiness, but they mostly apply to someone trying to be "clever" with a sole trader and a Ltd Co side by side. "you" are just a sole trader, one consolidated turnover, one industry rate which is likely to be the 16.5% limited cost trader.

okchimken

Thanks for the quick reply! I can confirm that the business does qualify for sector specific rate as our qualifying expenditure is *well* above the threshold. I just prefer the simplicity of FRS + AA.

The aim of all of this is simplicity. That was my assumption on the associated business stuff but I confirm that it is all under me as a sole trader. Is it sensible to do things like Invoice under the original agency header etc as that is the business name registered with VAT or is that not a particularly big deal do you think?

00ec25

okchimken wrote: »

Thanks for the quick reply! I can confirm that the business does qualify for sector specific rate as our qualifying expenditure is *well* above the threshold. I just prefer the simplicity of FRS + AA.

OK, so what is the threshold that you are "well" above?
Yours must be a very unusual marketing "agency" if you have sufficient qualifying expenditure.
you have to use the rate applicable to the "predominant" business activity. You canot have separate rates under separate businesses because you are a single business, the sole trader with a single Vat registration.

You can call yourself as many trading names as you want, but as said, VAT groups apply to Ltd, and you ain't. You cannot have separate VAT registrations

okchimken wrote: »

The aim of all of this is simplicity. That was my assumption on the associated business stuff but I confirm that it is all under me as a sole trader. Is it sensible to do things like Invoice under the original agency header etc as that is the business name registered with VAT or is that not a particularly big deal do you think?

If you want simplicity then use the VAT name as that is what people would find if they check your VAT number for their own due diligence.