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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3840
Experience:  Solicitors 2 years plus PQE
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I am a sole trader and run a removals business. I move peoples

Customer Question

I am a sole trader and run a removals business. I move peoples furniture and household belongings. Sometimes people require storage as they maybe going abroad or selling a house and moving into a temporary rented home. I will then contract with a storage provider and then Invoice my client with a margin on top.
I am within £10,000 of the VAT threshold and if I continue getting more storage business this will put me over the top.
Can I separate these out as two businesses and therefore have two VAT thresholds or will the tax man see them as the same. The removals business in essentially a labour business whereas the storgae business is essentially a bought in service whihc i markup and resell, but they are obviously closely connected as I will use my removal van to take the goods to the storage space and the initial enquiry will come through my removal advertising. Basically I need to know:
a. Can i separate these out as two business or isit a definite know.
b. If i sepratethem out can I run them both as sole traders or woul it be better if I mad the storage business a limited company?
c. If i can separate them out can I then transfer business that is in the removals business to the limited company?
Submitted: 2 years ago.
Category: Law
Expert:  Alex J. replied 2 years ago.
Hi, Thank you for your question and welcome. My name is ***** ***** I will assist you. If you form a limited company for this business, a limited company is a separate legal entity and will need to meet its own threshold. Of course you can separate the business, what you would need to is transfer the assets and good will of the business into the limited company in return for shares, or licence the assets and goodwill to the company. It must be a separate trading entity though for your intended purpose i.e separate accounts, separate bank accounts etc. Can I assist you any further? Kind regards AJ
Customer: replied 2 years ago.

So if i separte them out as two entites there is no way the Revenue can claim there are the same business and therefore as long as I comply with all the rules, I can efffectively run the same businesses with twe vat thresholds.

Expert:  Alex J. replied 2 years ago.

Thank you.

As long as they are actually separate business and not part of a group then they should have separate thresholds.

Do they have separate bank accounts and separate accounting structures?

Kind regards