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Branching out
Key points
- Ensure there is a clear division of trading activities when splitting businesses.
- Considerations to bear in mind before registering voluntarily for VAT.
- Claiming input tax on capital costs incurred before registration.
- Partial exemption de minimis rules and input tax on rent.
The opening chapters of a post Covid-19 tale involving an imaginary high street clothes shop owned by Kate were the subject of my article ‘Retail therapy’ (Taxation 11 June 2020 page 18). She converted the first-floor storage area into an apartment and also rented out some ground floor space to a separate business called Snappy Shoes with a ‘shop-in-shop’ arrangement. She also developed her online sales using a website designed for her by an Indian business. It was a fast-moving journey in a short space of time.
But there’s more: it is now April 2021 and Kate is shocked to learn that many nail...
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