I have a client, who is currently a sole trader who is combining his business with his fathers' also a sole trader and creating a limited company (they both carry out the same trade).
Both of these businesses are VAT registered.
How should they deal with the new limited company with regard to registering it for VAT
And how should they deal with the VAT registration for the 2 sole trader businesses
1. where a business is transferred as a going concern (TOGC), the taxable turnover of the 'old' business counts towards the registration threshold of the 'new' business. If the two sole trader businesses had combined turnover exceeding the threshold, then the limited company is required to be registered immediately. The TOGC rules also mean that, in this circumstance, there is no VAT charge on the transfer of the business. 2. I generally advise that a new VAT registration number is obtained. Although it means having new stationery (which I think you will need anyway), any potential VAT debts in either sole trader business do not affect the limited company.
