I am a sole shareholder of two limited companies that carry on the same activity (but one provides services to VATregistered and the other to non-VAT registered clients). Each company is independent from the other financially; they share premises but costs are recharged from contracted company to the other at arms-length). One is registered for VAT but the other is not. How likely is it that the HMRC will treat them as one business for VAT registration purposes (i.e. on the basis of artificial business splitting)?

Arthur Weller replies:
HMRC have a whole manual about this subject www.gov.uk/hmrc-internal-manuals/vat-single-entity-anddisaggregation-manual, but unfortunately a lot of the relevant material has been withheld. Since the two businesses share the same activity, and the same premises, and possibly the same people working in the two businesses, it is very likely that HMRC will argue that this is a case of artificial separation.