Readers’ forum: Training and tax

We have taken on a new client and there is either a major VAT problem or corporation tax issue possibly both. Our client has two activities. First training courses for people buying property in Spain. The business trades as a sole trader with its own bank account invoicing and purchasing etc. It is VAT registered and annual sales are about £100 000. The second business is training courses for chefs focusing on Spanish food. This business has traded as a limited company since 2015 and is not VAT registered with annual turnover around £30 000. The sole trader from the training course business is the only director and shareholder.

Since the sole trader business started in 2018 the previous accountants have consolidated all income and expenditure into the limited company accounts treating it as a division of the company which pays corporation tax...