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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I run a pet sitting agency and contract work out to a few

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Hi there,I run a pet sitting agency and contract work out to a few different self employed workers.The client pays us and then we pay our workers at the end of the assignment.We are getting close to the vat threshold so I was wondering if we could avoid registering for vat by changing the way we take payment.We thought we could take our share (say 50%) as a deposit to secure the booking from the customer and then the customer pays the remaining balance directly to our workers so that we don't need to include the workers share (50%) in our income figure?Is this allowable? If not, do you have any other thoughts?Many Thanks, Adam
Submitted: 7 months ago.
Category: Tax
Expert:  taxadvisor.uk replied 7 months ago.

Hello and welcome to JustAnswer. I am here to help you. I am reviewing your question and will respond to you shortly.

Expert:  taxadvisor.uk replied 7 months ago.

Thank you for your question

If you are a supplier to your customer and the contract is between you/your agency and the customer, you have to account for total turnover in your books, I'm afraid.

If your customer was to pay half the contract fee to the workers direct, there is a danger these self employed workers would become contactors in their own right and undercut you in price.. its a risky strategy.

You could consider breaking your business into locations or types of service offered and use one part as LTD company and the other as self employed. A LTD company is a separate legal entity nd will have its own threshold for VAT registration.

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Customer: replied 7 months ago.
Hi there,Thanks for your response.I have looked into separating off my business before but from what I have read, this can only be done if the services offered are completely separate from each other?We offer home dog boarding (50% of our turnover) pet sitting (20% of our turnover) and dog walking services (30% of our turnover) but surely these services are too similar to be able to separate them off into different entities?Many Thanks, Adam
Expert:  taxadvisor.uk replied 7 months ago.

Thank you for your reply..

I would classify pet sitting and walking service different from home dog boarding.

You can separate them if you so wish.

I hope this is helpful and answers your question.

Customer: replied 7 months ago.
Hi there,Thank you, ***** ***** think pet sitting & dog walking are similar services so could not be separated but home dog boarding is different so could be separated from the walking & pet sitting side of things?Would you recommend setting them both up as limited companies or just the home dog boarding side of the business and keeping the dog walking & pet sitting side as self employed?Many Thanks, Adam
Expert:  taxadvisor.uk replied 7 months ago.

Adam, thank you for your reply.

If I were you, I would put a case for all three being separate activities and independent of each other.
I suggested you could separate home dog guarding from the others initially and when the business grows further, separate pet sitting from dog walking and have three separate operations.

At the moment operate one group as self employed and the other as LTD company.

I hope this is helpful and answers your question.

If you are happy and there are no more issues I will appreciate if you would kindly rate/accept the service I provided to ensure I get credited for it by Just Answer.

Expert:  taxadvisor.uk replied 7 months ago.

Hi Adam

Just checking to see if you need further clarification or does my answer meet your requirements..

Many thanks

taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4931
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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Expert:  taxadvisor.uk replied 7 months ago.

I thank you for accepting my answer.

Best wishes

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