Pest Control

[Chris34]

To run it as separate business from HMRC point of view you have to use different vehicles and a host of other things it’s very difficult to separate them

I don't think you do need separate vehicles, it depends on your business set up. For me I own the vehicle and the business is charged per mile, so that means any other business I set up I can just charge that business per mile in the same way. This keeps it separate. Obviously it couldn't be sign written but you could have magnetic signs and switch them.

As I understand it, everything just has to be separated and you can't have one business complimenting the other. It's probably a grey area that in many cases would be in the business persons favour, it's not black and white, the idea that it must be separate is black and white but what's classed as separate is a grey area with a lot of it. I think the main thing is that you've made an effort to keep them separate and that they do not compliment each other.

 

[ched999uk]

The fact that there is no similarity in the add ons you mention is actually better imo, that means it can be classed as a different business if need be to avoid registering for vat, I don't think that soft washing and pressure washing you could do that, I could be wrong but I think it's too similar.

HMRC require a lot of things to enable it to be classed as 2 businesses. Like different vehicles, 2 insurance policies, they are very wise to people trying to duck vat. HMRC are the 1 organisation in the UK where you have to prove your innocence, they don't have to prove you are guilty. Be very careful and get a very good accountant before trying to run 2 businesses alongside each other. You may remember a number of celebrities have been fined big time for 'tax issues' and they where paying their accountants very handsomely!!!

 

[Chris34]

HMRC require a lot of things to enable it to be classed as 2 businesses. Like different vehicles, 2 insurance policies, they are very wise to people trying to duck vat. HMRC are the 1 organisation in the UK where you have to prove your innocence, they don't have to prove you are guilty. Be very careful and get a very good accountant before trying to run 2 businesses alongside each other. You may remember a number of celebrities have been fined big time for 'tax issues' and they where paying their accountants very handsomely!!!

You don't need separate vehicles. The way to look at it is my van is mine, it's not the businesses. I got my van 15 or so years ago, the business started 4 years ago. I loan my van to the business. All repair costs are met by myself, all insurance is met by myself but the business has to pay per mile to use it.

Basically the business doesn't get a say on what the van is used for as it doesn't own it. So I can lend my van out to other businesses if I wish to do so.

Everything else is fairly straight forward. You need separate everything. But it is a grey area. I'd be confident that in most cases if you went to court you would win.

The whole system is based on trust, I know loads of people making loads of money on the side, non of them have had any look at by the taxman, despite thousands being paid into their bank accounts. So I don't expect they'd be interested in per suing anyone through the courts over what's classed as two separate businesses,

 

[ched999uk]

You don't need separate vehicles. The way to look at it is my van is mine, it's not the businesses. I got my van 15 or so years ago, the business started 4 years ago. I loan my van to the business. All repair costs are met by myself, all insurance is met by myself but the business has to pay per mile to use it.

Basically the business doesn't get a say on what the van is used for as it doesn't own it. So I can lend my van out to other businesses if I wish to do so.

Everything else is fairly straight forward. You need separate everything. But it is a grey area. I'd be confident that in most cases if you went to court you would win.

The whole system is based on trust, I know loads of people making loads of money on the side, non of them have had any look at by the taxman, despite thousands being paid into their bank accounts. So I don't expect they'd be interested in per suing anyone through the courts over what's classed as two separate businesses,

I get what you are saying but HMRC are a law to themselves. IF they perceive you are 'creating' 2 businesses to avoid any tax then you are guilty and you have to prove you didn't setup 2 businesses to avoid tax.

As you say lots of people avoid tax illegally and some get caught!

If you think it's a 'grey area', as you have just posted, then that's probably all HMRC would need to win the case! You have put it in writing on a public forum!!!

It's up to you how you run things and I'm in no way telling you how to.
I was really posting so that anyone that finds this thread doesn't think just by setting up 2 businesses to avoid tax they will be OK.

Also I assume you are declaring income (and expenditure) from 'renting' your van to a business on your personal tax return? If you are a sole trader and not ltd then again that becomes a grey area!

 

[K in Kent]

The fact that there is no similarity in the add ons you mention is actually better imo, that means it can be classed as a different business if need be to avoid registering for vat, I don't think that soft washing and pressure washing you could do that, I could be wrong but I think it's too similar.

Depends how you want to grow the business. If someone wants to use a website and online presence (Google Business Profile etc) then the best way i to establish some authority within a particular niche and having one website with related ervices that are relevant to each other..

But I've also got to say that one experience with one customer is hardly grounds for a new business venture

 

[Chris34]

I get what you are saying but HMRC are a law to themselves. IF they perceive you are 'creating' 2 businesses to avoid any tax then you are guilty and you have to prove you didn't setup 2 businesses to avoid tax.

As you say lots of people avoid tax illegally and some get caught!

If you think it's a 'grey area', as you have just posted, then that's probably all HMRC would need to win the case! You have put it in writing on a public forum!!!

It's up to you how you run things and I'm in no way telling you how to.
I was really posting so that anyone that finds this thread doesn't think just by setting up 2 businesses to avoid tax they will be OK.

Also I assume you are declaring income (and expenditure) from 'renting' your van to a business on your personal tax return? If you are a sole trader and not ltd then again that becomes a grey area!

I don't fear HMRC. Most people fear them, it's understandable if you don't know what you're doing. I do all my own tax, I don't just hand it over to an accountant and let them deal with it all, reason being for one it's easy enough to do it yourself, number two is that your tax is your responsibility, not your accountants, so any errors rest on your own shoulders, not on your accountants.

It's not difficult and all these stories are just scaremongering about the taxman getting on your case. It's not rocket science, it really is straight forward and if you want to get anywhere in business then it's best learning about the basics of it.

'Also I assume you are declaring income (and expenditure) from 'renting' your van to a business on your personal tax return? If you are a sole trader and not ltd then again that becomes a grey area!'

It's the flat rate scheme, look it up it's super simple. As stated, I own the van, the business doesn't own it, if it breaks down then the costs are met by myself, not the business.

 

[ched999uk]

I don't fear HMRC. Most people fear them, it's understandable if you don't know what you're doing. I do all my own tax, I don't just hand it over to an accountant and let them deal with it all, reason being for one it's easy enough to do it yourself, number two is that your tax is your responsibility, not your accountants, so any errors rest on your own shoulders, not on your accountants.

It's not difficult and all these stories are just scaremongering about the taxman getting on your case. It's not rocket science, it really is straight forward and if you want to get anywhere in business then it's best learning about the basics of it.

'Also I assume you are declaring income (and expenditure) from 'renting' your van to a business on your personal tax return? If you are a sole trader and not ltd then again that becomes a grey area!'

It's the flat rate scheme, look it up it's super simple. As stated, I own the van, the business doesn't own it, if it breaks down then the costs are met by myself, not the business.

I know from my brother in law's experience when he was investigated by HMRC that it's not nice and drags on for months with visits asking him to justify every receipt.

I'm not scared of them as I believe that every cost I put through I would be happy to justify.

As you say it's fairly straight forward but a good accountant can advise on how best to reduce your liability in ways you don't know exist.

The flat rate scheme, if I remember correctly is something like 45p per mile for the first 10Kmiles which I would be surprised if it covered fuel, insurance, tax, depreciation, repairs, maintenance etc. It hasn't gone up in real terms in about 2 decades to my knowledge - it's about the same as when I used to claim it from my employer and that was almost 20 years ago! If you are intending to 'rent' the van out to 2 businesses then maybe it could work that way and be cheaper tax wise. I am sure you have done the calcs.

Bottom line, if you are happy and confident in the way you do things then you should be fine.