A sole trader is voluntarily registered for VAT on trade A but does not want to charge VAT for trade B. He is a sole trader photographer who has commercial clients (VAT registered) and is voluntarily registered for VAT. Due to the coronavirus pandemic he wants to make and sell furniture to private individuals (not VAT registered). Can he run the furniture business as though it is not VAT registered and not charge the 20% output tax and not claim input tax whilst keeping the photography business as VAT registered? Or should he set up one business as a limited company? Or should he deregister the photography business?

Arthur Weller replies: 

If you look at HMRC’s internal VAT Registration manual you can see that it says: 'In all cases it is the person (natural or legal) rather than the business which is registered, so a trader must take into account all their business activities.' So maybe the simplest solution for you would be to de-register the photography business. Presumably it requires some 'number crunching' to determine whether you will gain more than you will lose by doing so.