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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15979
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I have a new client who is a builder. He is proposing to setup

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I have a new client who is a builder. He is proposing to setup a limited company rather than operate as self employed. Most of his work is in the private sector, mainly extensions. He charges his customers for his time but gets them to order and pay for the materials direct which is not put through the books. Thus it keeps him below the vat threshold and keeps him competitive. Is it ok to do this ?

There is nothing wrong with what you new client is doing. I know several people who have ordered and bought the materials themselves, sometimes on the advice of the builder they intend to employ, sometimes not. Take a look at the first result of the search here. Its really no differeent to me buying some flat packed furniture and paying my brother in law to put it together for me. All he is doing is providing labour.

I hope this helps but let me know if you have any further questions.
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