Two business’s under one name

electrician81

Hi,
im a self employed electrician I work for same person all year round they pay my 20% cis. I earn around £65k a year. I also have a car selling business which earns around 40k per year pre tax profit. 

Obviously these are two completely separate business industries there is no questioning that but as neither are limited companies the turnover for both as I understand it is added together as I’m a sole trader. 

For obvious reasons I don’t want to be vat registered I would loose 20% on all car sales and couldn’t pass it on. 

How can I legally separate the turn overs? 

Could I put car sales into my wife’s name?
thanks for any help in advance 

Isthisforreal99

What makes you think the turnovers should be added together - they absolutely should not. You complete 2 seperate sole trader pages and keep the income and expenses seperate.

electrician81

Hi, thank you for your reply.
as I read it while doing some research. Because I run both business’s under a sole trader the turnover combined is subject to vat threshold as it’s treated as one income combined. Is this not the case then? 

electrician81

This is what google says…….

if you operate two businesses as a sole trader, 

they are generally treated as a single entity for VAT purposes

electrician81

Isthisforreal99 said:

What makes you think the turnovers should be added together - they absolutely should not. You complete 2 seperate sole trader pages and keep the income and expenses seperate.

From google……

if you operate two businesses as a sole trader, 

they are generally treated as a single entity for VAT purposes

Altior

What's your turnover on cars if the profit is £40K?

Used cars = margin scheme for vat. 

Isthisforreal99

electrician81 said:

This is what google says…….

if you operate two businesses as a sole trader, 

they are generally treated as a single entity for VAT purposes

If the businesses were similar in nature, such as you tried to split your electrician business in 2 to avoid VAT registration then that wouldn't work but 2 distinct businesses like you have is fine - as long as you declare them as such on your Tax Returns.

electrician81

Isthisforreal99 said:

electrician81 said:

This is what google says…….

if you operate two businesses as a sole trader, 

they are generally treated as a single entity for VAT purposes

If the businesses were similar in nature, such as you tried to split your electrician business in 2 to avoid VAT registration then that wouldn't work but 2 distinct businesses like you have is fine - as long as you declare them as such on your Tax Returns.

Isthisforreal99 said:

electrician81 said:

This is what google says…….

if you operate two businesses as a sole trader, 

they are generally treated as a single entity for VAT purposes

If the businesses were similar in nature, such as you tried to split your electrician business in 2 to avoid VAT registration then that wouldn't work but 2 distinct businesses like you have is fine - as long as you declare them as such on your Tax Returns.

Obviously the business’s are totally different. So the that statement saying all business’s operated by one sole trader are considered one entity so liable for vat doesn’t count then? 

electrician81

Altior said:

What's your turnover on cars if the profit is £40K?

Used cars = margin scheme for vat. 

Around £60k turnover for cars. Profits are high compared to purchase price.

Altior

You are quite possibly conflating personal tax with the legislation for business. If you aren't already aware of the margin scheme, you are long past needing to consult with a competent bookkeeper or accountant! 

electrician81

Altior said:

You are quite possibly conflating personal tax with the legislation for business. If you aren't already aware of the margin scheme, you are long past needing to consult with a competent bookkeeper or accountant! 

I don’t know what you mean sorry. I guess this is why I’m asking for help on how to do it properly and legally if I knew I wouldn’t need to ask for help. Better business turns over more than £90k individually so never bothered looking into vat until I saw that it might affect me based on big incomes being combined into one.