Two business’s under one name

Isthisforreal99

electrician81 said:

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? 

Google isn't always correct. What does your accountant say? Surely you have one at your level of income?

electrician81

Isthisforreal99 said:

electrician81 said:

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? 

Google isn't always correct. What does your accountant say? Surely you have one at your level of income?

I release google isn’t always correct hence why I’m asking for help and advice on here. Do you think if I had an accountant I’d be asking on here? Can we just be kind with replies rather than cocky an trying to make me look stupid. 

I haven’t needed an accountant up until now. My cis electrical income is very easy my tax return yearly takes around 30 mins to complete. 

The car sales have snowballed didn’t start off intending to sell 40 plus cars so I’m now looking into all my tax implications so it’s all done correctly hence asking you smart asses for your help and sarcastic comments. 🙄

Altior

electrician81 said:

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.

The best advice is to seek a professional. I'm not being cheeky but they'd need to see real life detail to suitably advise you.

You can read about the margin scheme here

In layman's terms, the VAT is calculated for the gross profit alone, not the selling price when selling a used vehicle. Regular sales and purchases (outside of the vehicles themselves) are treated as standard. So you could for example reclaim the VAT on normal expenses, parts etc. 

electrician81

Altior said:

electrician81 said:

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.

The best advice is to seek a professional. I'm not being cheeky but they'd need to see real life detail to suitably advise you.

You can read about the margin scheme here

In layman's terms, the VAT is calculated for the gross profit alone, not the selling price when selling a used vehicle. Regular sales and purchases (outside of the vehicles themselves) are treated as standard. So you could for example reclaim the VAT on normal expenses, parts etc. 

I did have a read up on the margin scheme. But if one of the people who replied stating both business are completely different so I would be ok and not liable to vat then it doesn’t matter. Neither bussiness would reach the 90k turnover.
vat margin from what I read is optional. 

Altior

electrician81 said:

Altior said:

electrician81 said:

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.

The best advice is to seek a professional. I'm not being cheeky but they'd need to see real life detail to suitably advise you.

You can read about the margin scheme here

In layman's terms, the VAT is calculated for the gross profit alone, not the selling price when selling a used vehicle. Regular sales and purchases (outside of the vehicles themselves) are treated as standard. So you could for example reclaim the VAT on normal expenses, parts etc. 

I did have a read up on the margin scheme. But if one of the people who replied stating both business are completely different so I would be ok and not liable to vat then it doesn’t matter. Neither bussiness would reach the 90k turnover.
vat margin from what I read is optional. 

It is. However these special schemes, margin, flat rate can be net beneficial for the operator. As I say, you can reclaim VAT on exes. But someone needs to look at it for you.

Personal tax efficiency across the two businesses is a whole different ballgame. If they aren't linked for business purposes, they certainly are for your personal tax liability. But there are methods of mitigating it. 

electrician81

Altior said:

electrician81 said:

Altior said:

electrician81 said:

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.

The best advice is to seek a professional. I'm not being cheeky but they'd need to see real life detail to suitably advise you.

You can read about the margin scheme here

In layman's terms, the VAT is calculated for the gross profit alone, not the selling price when selling a used vehicle. Regular sales and purchases (outside of the vehicles themselves) are treated as standard. So you could for example reclaim the VAT on normal expenses, parts etc. 

I did have a read up on the margin scheme. But if one of the people who replied stating both business are completely different so I would be ok and not liable to vat then it doesn’t matter. Neither bussiness would reach the 90k turnover.
vat margin from what I read is optional. 

It is. However these special schemes, margin, flat rate can be net beneficial for the operator. As I say, you can reclaim VAT on exes. But someone needs to look at it for you.

Personal tax efficiency across the two businesses is a whole different ballgame. If they aren't linked for business purposes, they certainly are for your personal tax liability. But there are methods of mitigating it. 

Altior said:

electrician81 said:

Altior said:

electrician81 said:

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.

The best advice is to seek a professional. I'm not being cheeky but they'd need to see real life detail to suitably advise you.

You can read about the margin scheme here

In layman's terms, the VAT is calculated for the gross profit alone, not the selling price when selling a used vehicle. Regular sales and purchases (outside of the vehicles themselves) are treated as standard. So you could for example reclaim the VAT on normal expenses, parts etc. 

I did have a read up on the margin scheme. But if one of the people who replied stating both business are completely different so I would be ok and not liable to vat then it doesn’t matter. Neither bussiness would reach the 90k turnover.
vat margin from what I read is optional. 

It is. However these special schemes, margin, flat rate can be net beneficial for the operator. As I say, you can reclaim VAT on exes. But someone needs to look at it for you.

Personal tax efficiency across the two businesses is a whole different ballgame. If they aren't linked for business purposes, they certainly are for your personal tax liability. But there are methods of mitigating it. 

I just need to know if both incomes are subject to vat if they need to be combined. If they don’t that’s all I need to know. My employer takes my 20% from my electrics income I would then just need to pay any tax due on car business. I’m happy I can do this each April I just need to know if both incomes combined make me eligible for vat. That’s really all I’m asking. 

Dead_keen

My understanding is that it is the trader that is VAT registered, not the business.  So that suggests the OP would need to aggregate the turnover of both trades.  

Have a look at this page and the link to HMRC's manual: https://library.croneri.co.uk/cch_uk/etc/67820

I should say that VAT is not my area of expertise.

sheramber

electrician81 said:

Isthisforreal99 said:

electrician81 said:

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? 

Google isn't always correct. What does your accountant say? Surely you have one at your level of income?

I release google isn’t always correct hence why I’m asking for help and advice on here. Do you think if I had an accountant I’d be asking on here? Can we just be kind with replies rather than cocky an trying to make me look stupid. 

I haven’t needed an accountant up until now. My cis electrical income is very easy my tax return yearly takes around 30 mins to complete. 

The car sales have snowballed didn’t start off intending to sell 40 plus cars so I’m now looking into all my tax implications so it’s all done correctly hence asking you smart asses for your help and sarcastic comments. 🙄

I haven’t needed an accountant up until now.”

But, as you state, things have changed, so maybe now is the time you do need one, rather than relying on strangers on a public forum.

electrician81

sheramber said:

electrician81 said:

Isthisforreal99 said:

electrician81 said:

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? 

Google isn't always correct. What does your accountant say? Surely you have one at your level of income?

I release google isn’t always correct hence why I’m asking for help and advice on here. Do you think if I had an accountant I’d be asking on here? Can we just be kind with replies rather than cocky an trying to make me look stupid. 

I haven’t needed an accountant up until now. My cis electrical income is very easy my tax return yearly takes around 30 mins to complete. 

The car sales have snowballed didn’t start off intending to sell 40 plus cars so I’m now looking into all my tax implications so it’s all done correctly hence asking you smart asses for your help and sarcastic comments. 🙄

I haven’t needed an accountant up until now.”

But, as you state, things have changed, so maybe now is the time you do need one, rather than relying on strangers on a public forum.

I had hoped folk may know the answer but I don’t it’s the case. I’ll now thinking I do need an accountant to answer my question as I’m getting conflicting answers.
thank you all for your time in answering. 

Altior

electrician81 said:

sheramber said:

electrician81 said:

Isthisforreal99 said:

electrician81 said:

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? 

Google isn't always correct. What does your accountant say? Surely you have one at your level of income?

I release google isn’t always correct hence why I’m asking for help and advice on here. Do you think if I had an accountant I’d be asking on here? Can we just be kind with replies rather than cocky an trying to make me look stupid. 

I haven’t needed an accountant up until now. My cis electrical income is very easy my tax return yearly takes around 30 mins to complete. 

The car sales have snowballed didn’t start off intending to sell 40 plus cars so I’m now looking into all my tax implications so it’s all done correctly hence asking you smart asses for your help and sarcastic comments. 🙄

I haven’t needed an accountant up until now.”

But, as you state, things have changed, so maybe now is the time you do need one, rather than relying on strangers on a public forum.

I had hoped folk may know the answer but I don’t it’s the case. I’ll now thinking I do need an accountant to answer my question as I’m getting conflicting answers.
thank you all for your time in answering. 

It's too complicated and involved for a forum, imo. You can be pointed in the right direction, seek professional advice.

Your relationship with your 'employer', your turnover, the nature of the businesses, your personal tax liability. So many variable elements. I sense your reporting to date may need correcting, unfortunately. 

Even I am unsure of what the scenario entails if a sole trader has two disparate enterprises, where the nature of the business would lead to two different VAT schemes.