Married Couple - 2 companies, same address

[WindyAnna]

Me and Mr WA are both contractors. We are now both UK based so will need to wokr through UK Ltd (he was previously in Europe).

So, we have 2 limiteds - only I've been advised that HMRC will consider it to be one company in terms of flat rate VAT etc as we are married? Combined turnover would blow flat rate VAT.

Is this true? Can we register second company from any address (e.g. my parents)?

Thanks y'all

Windy

[b0redom]

That can't be right - what about accountants being registered addresses for lots of Ltds?

[pmeswani]

Me and Mr WA are both contractors. We are now both UK based so will need to wokr through UK Ltd (he was previously in Europe).

So, we have 2 limiteds - only I've been advised that HMRC will consider it to be one company in terms of flat rate VAT etc as we are married? Combined turnover would blow flat rate VAT.

Is this true? Can we register second company from any address (e.g. my parents)?

Thanks y'all

Windy

If your accountant told you that, then that is rubbish and should be sacked. The Flat Rate scheme is related to your business, not to the individual, regardless of who the Director of the business is and where the business is being run from. I reckon that your accountant is trying to find a way to reduce the workload.

[Alan @ BroomeAffinity]

If the VAT office can oprove that the 2 businesses are 1 business that has been artificially divided in order to save / avoid VAT then they can effectively put them both together. It happened to clients of mine years ago and I can't remember the full details. I think there needs to be common directors and ownership but I can't be sure.

If you can prove that they are two individual companies then you should be OK.

[WindyAnna]

Thanks all - advice was not from an accountant but from another contractor who says it happened to him. We have not got the same directors (me for mine, Mr WA for his), our clients are completely different, however we do both work in SAP.

WA

[pmeswani]

Thanks all - advice was not from an accountant but from another contractor who says it happened to him. We have not got the same directors (me for mine, Mr WA for his), our clients are completely different, however we do both work in SAP.

WA

Personally I would see that as 2 separate entities. But that is based on my understanding of this thread and my somewhat limited knowledge of life in general.

[Alan @ BroomeAffinity]

I can't see how there could be any problems in that case.

The client I had split his business in 2 so that both sides would be below the VAT threshold (before we acted for him - not on my advice, btw). The VATman came in had a look, had a laugh and then made what I believe was called a complulsory partnership between the two entities.

[BrilloPad]

Thanks all - advice was not from an accountant but from another contractor who says it happened to him. We have not got the same directors (me for mine, Mr WA for his), our clients are completely different, however we do both work in SAP.

WA

So you asked opinion from some contractor you met down a pub and took their word as true?

Next you will be asking an open internet forum for advice and believing it.....

[xoggoth]

I had occasion to look this up once as I run a company with my sister and the related companies thing can apply not just if the companies are effectively related in business terms, sharing work for example, but by an actual relationship between the directors. A different address would not help. That's for CT purposes anyway, not sure if it applies to flat rate VAT.

However there are various conditions and extra statutory concessions. Best thing is just search for related companies on the HMRC webtulipe, it's all explained fairly well on there somewhere.

PS Not sure "related companies" is right search term. Anyone know the proper term? I've forgotten.
PPS It's associated companies. Darned if I can find it on that crappy site but it'sthere somewhere.

[VectraMan]

I agree with Mr. X. I didn't join the FRS initially as an ex-director and current shareholder of another VAT registered company I didn't think I could. But some trawling of the website by me and my accountant and we agreed I was eligible.

It's not as simple as "they're two seperate legal entities so sod off". Remember FRS is a concession to save on paper work, it's not a right. In theory you don't lose out by not being on the FRS.