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poloprince
30-05-2007, 09:03 PM
Hello all,

Just a question about VAT which you might know the answer to..
This is a new venture - I am going to be selling on eBay UK in large volumes with each item approximately 180 sale price.

Therefore turnover will reach the 64k threshold for VAT fairly quickly.

Seeing as it is eBay and repeat customers are not the highest priority when there are millions of new ones out there, could I set up a new Ltd company when I approach the threshold and close the existing company?

They would be separate legal entities being Ltd and not sole trader so I assume this would be acceptable..?

I would be grateful for a few views before I mention it to the accountant.

Thank you very much

JamieM
30-05-2007, 09:19 PM
Hi poloprince,

No, you are not allowed to do this as it is tax avoidance.

brighton_belle
30-05-2007, 09:24 PM
Hi there

I'm not entirely sure why you would want to close down a company if it's turnover reaches and passes the 64k threshold...if it's to avoid the vat registration/vat accounting then you can't do this as JamieM says above, it is tax avoidance.

You can have more than one ltd company and also be a sole trader but don't forget that the turnover of each of them counts towards the vat threshold.

Also, you say that repeat customers are not the highest priority...but repeat customers are worth their weight in gold when it comes to word of mouth/recommendations for your products and company. If you were to close one and start another you would have to go through winning those customers back again.

I'm no expert and I would advise that you speak to either an accountant, your local business link or HMRC direct.

brighton_belle