Registering for VAT

Z

Zutz

Registered User
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Hi, I am a small company, three years in operation and involved in the services industry. Up until now, my business has not reached the VAT threshold of €37,500 but getting close to it. 85% of my turnover is to the general public who cannot claim back VAT, if I registered. I have very few purchases.

My business supplies two different and unrelated services. I was wondering would be be possible for me to set-up a new company each then offering a different service. This would allow me to trade up to the threshold in each, keep me competitive and avoid charging VAT. Would this be possible/legal?
 
This is covered under 'Anti-fragmentation'

S. 8(3)(e)(i) VAT Act 1972:

“ …where in the case two or more persons one of whom exercises control over one or more of the other persons, supplies of … services of the same nature are made by two or more of those persons, the total of the consideration relating to the said supplies shall, for the purposes of the application of paragraphs (c) and (e) in relation to each of the persons aforesaid who made the said supplies be treated as if all of the supplies in question had been made by each of the last-mentioned persons;”

This comes up quite alot. In your circumstance, with two completely unrelated products, you should be fine.
 
Are you trading as a Sole Trader or a Registered Company? I think this makes a difference and if you are trading as a sole trader then your businesses cannot be seperated as far as I know
 
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