Can I legally sell products from one of my businesses to another for a slight profit?

Jlawson118

I'll try keep this short;

Couple of years ago I started a LTD company aimed at digital media production. It was more of a hobby and never replaced my full time job. I was producing marketing content for local businesses, but my main source of income was from an old YouTube channel earning ad revenue. 

Though mid-last year there was a change in the algorithm and the income significantly reduced, from there I was unable to really invest much into expanding it further.

In May, I quit my full time job and set up a second LTD company as a courier and logistics business. I'm mainly subcontracting to other businesses but I am starting to win my own customers over. Business is doing fantastic and I'm already looking into supplying goods and setting up shop on the likes of Amazon and eBay to link up with my logistics side.

With my media business underperforming, and having more of an income on the logistics side, I've switched most of my business credit facilities over to the logistics company. I have things like rewards credit cards, wholesale accounts etc.

Business has started picking up slightly on the media front and I've decided to invest a final couple of hundred pounds into trying to grow it a little further. 

To access my wholesale accounts to buy new equipment, I purchased some goods through the logistics company, with the aim to sell this onto my media company. It's by no means tax avoidance or anything else, I'm merely say, buying a HDMI cable for example for £12.99 and want to sell it onto my media company for maybe £15, plus a few other goods and potentially £5 shipping/courier fees?

It's more the logistics business is my full time job and will be paying me a full time wage, whereas the media company if it starts turning in a profit, will just be dividends, and I would like to start building a decent looking turnover for the logistics company and start getting the accounts rolling.

Everything would be invoiced and taxed and done by the book.

I'm just wondering if legally I would be allowed to do this? Or could it be seen as being a little dodgy?

MDMD

Yes this happens all the time, it’s called Transfer Pricing although you will probably be exempt.

https://www.gov.uk/guidance/transfer-pricing-transactions-between-connected-companies

if you do sell from one company to another and the sell8ng company is VAT registered then you may need to charge VAT.

tightauldgit

Yes you can sell at a profit from one company to another but I think if the prices looked unreasonable it might raise some questions.