How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask bigduckontax Your Own Question
bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4414
Experience:  FCCA FCMA CGMA ACIS
75394688
Type Your Tax Question Here...
bigduckontax is online now

I have a client who organises/promotes events (concerts etc)

Customer Question

I have a client who organises/promotes events (concerts etc) as well as providing/running a bar on the day of the event.

Would it be possible to split the business into 2 companies - 1 promoting the events and 1 providing the bar. Each of the businesses would be run by a separate director.

Would HMRC allow this?
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello, I'm Keith and happy to help you with your question. There appears no objection to the proposal you suggest.

Two companies could be created. One could run events and the other provide bar services. There is no requirement for the companies to have separate directors though this may well reflect good governance.

It would be best if these companies started afresh and the old concerns ceased to trade and shut down
Customer: replied 3 years ago.

Hello Keith. One of the companies has just started and the event has been promoted but is due to take place in about 4-5 weeks time so only the promotional activity side has occurred.


 


A husband and wife run the business (one concentrating on promotion the other on the bar/security side).


 


My concern was really with regard to VAT as combined the income would breach £81k.

Expert:  bigduckontax replied 3 years ago.
But it is the separate companies activities which would be considered in isolation for VAT registration. That is one of the reasons I suggested closing down the old system and creating the new. If, however, the event company has contracted for both activities in the absence of the second then if it goes over the 81K limit it will have to register in its own right and charge VAT on all activities.
bigduckontax and other Tax Specialists are ready to help you
Customer: replied 3 years ago.

My client has only recently formed company 1 (well I formed it for them) and this will be their first event as a company (they had several events last year but that was as a sole trader).


 


I suppose the bar side that is something I would have to ask my client about.


 


Thanks you very much for your advice.

Expert:  bigduckontax replied 3 years ago.
Pleased to be of assistance.

Please be so kind as to rate me before you leave the site.
Expert:  bigduckontax replied 3 years ago.
Thank you for your support.
Customer: replied 3 years ago.

Not a problem. Have a great weekend.

Expert:  bigduckontax replied 3 years ago.
You are too kind!