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Situations in which business splitting can avoid an output tax problem or liability
KEY POINTS
- Remember that it is the person that is registered for VAT and not the business.
- Secondary sources of income from economic activities must be taken into account in calculating turnover.
- Property income can cause unexpected problems.
- In two recent cases the tribunal has held that the business ownership was different from that previously assumed to be the case by HMRC.
- Advisers should ensure that the business format is absolutely clear from inception.
A major challenge in the business world is to think about the VAT implications of a transaction or deal before it takes place – or before a new venture actually starts.
There are many tribunal cases where an accountant or taxpayer is frantically backpedalling as if they were a Tour de France cyclist who has taken...
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