I have a self employed taxi driver client who is from Bulgaria. Who is looking to increase his income by importing goods from Bulgaria & distributing them in the UK.
At the moment he is obviously not VAT registered as he is just a taxi driver and if he imports goods from Bulgaria he will have to pay VAT as he doesn't have a VAT number to give to his supplier in Bulgaria.
So my question are:
1. If he registers for VAT as an individual how does this impact on his takings as a taxi driver.
2. Would it be worthwhile for him to set a limited company and then register it for VAT to keep to two incomes separate.
It is the person, not the business, who is to be registered for VAT. Thus, if one person runs more than one business, then the cumulative turnover determines whether the registration threshold is breached. The response, as you suggest, is to have separate legal entities. This means each business is treated separately for VAT purposes. Do be aware of a change coming in on 1 December 2012 which requires non-UK persons to be registered for VAT irrespective of their turnover. See the latest information at http://www.hmrc.gov.uk/briefs/vat/brief3112.htm
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
