I'm already registered self-employed and am a 50% partner in an existing partnership (of 15 years), which is also VAT registered. I'm looking at setting up another business as a sole trader, but I can’t find a clear answer. Do I register as a new sole trader/business, or just complete an additional tax return next time around? Also, would my second business automatically be registered for VAT like the first one, even though it will be completely separate?
Arthur Weller replies:
Firstly, you would need to register the new sole trader business with HMRC because it is a separate entity to your partnership, and not wait for your tax return. With regard to VAT, see HMRC’s VAT Registration manual, which states: 'A carrying on business on his own account, as a sole proprietor, is a different person from A carrying on another business in partnership with B'. And 'A partnership comprised of A, B and C will only be allowed one registration, regardless of the diversity of its business activities. However, at the same time A, B and C individually may well have separate VAT registrations for activities carried on by them as sole proprietors'. So you need a new registration for your new sole trader business.