Any VAT experts out there?

[Helenagrace]

I need a bit of advice about how HMRC might view a change in my company structure.

Basically I want to offer some of what I currently offer to corporate clients to individuals. I'm limited and VAT registered but want to offer this to individuals as a sole trader with no VAT. So anything for a corporate clients goes through the company and attracts VAT but anything for an individual (or charity possibly) is done by me as a sole trader. The VAT registered company has my name in it so I was planning to use another company name as a sole trader. Just to complicate things I also have two other companies but they are in totaly different fields and I don't see them as being affected by this change.

Essentially I want to keep the two parts of what I do separate as the individual side might eventually be a bit too "touchy feely" for corporate clients. Being a sole trader would also mean that indvidual clients wouldn't have to pay VAT.

Is this likely to raise eyebrows at HMRC? My intention is not to evade tax but to keep the two sides of what I do separate.

Don't think this is possible, unfortunately. For the same reasons that they don't allow you to set up 2 Ltd companies at the same time both with turnovers just under the threshold, especially if they are n a related or identical industry. You'll be obliged to include and then declare and pay the VAT although you could consider how you market to individuals, ie 'all inclusive price of XX' which would include your VAT portion.

I don't see why you couldn't do this.

You could have 30 companies - all setup differently!

Esp if it is a completely different company name.

It will be very difficult to achieve - HMRC will see this as 'artificial separation of business activities' and their powers to prevent this are described here.

agree with Anchovy.
I have a client who has a VAT reg Ltd Co and a non vat reg sole trader but the two businesses are utterly different and each could live without the other

Thats the key though, they are separate endeavours. If hmrc think you are splitting your activities up in order to avoid VAT they'll intervene.

Thanks for the advice. It is as I thought. I'll have to think again about what I'm trying to do.