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The Book-keepers Forum -> Professional Book-keepers in Practice -> Prospective new client
Post Info TOPIC: Prospective new client
semsley


Guru

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Posts: 1251
Date: Wed Feb 22 01:28 2012
Prospective new client
 

The director at one of my clients has asked me if I would be interested in doing his wife's books.  I'm going to see her on Monday evening.  She has been operating as a VAT registered sole trader and does consulting, training, and all sorts of disability related stuff.  She  is moving into more speaking at events and is setting up a Ltd company to undertake this work and gradually move her self-employed work over to the Ltd company.  The reason she is not transferring it all over at once is because she has funding contracts and she doesn't want the hassle of changing everything for the funders when they are finite with regards to time.

The person I took over from at her husband's company has been doing the books for her sole trader work and will continue to do so until it has ended/been transferred to the Ltd company.

As the company will be her providing her own services what should I be discussing with her - would IR35 raise its ugly head.  Does the Ltd company have to be VAT registered from day one or can it wait until she reaches the threshold.  Can she be a VAT registered sole trader and un-VAT registered ltd company at the same time.  I have been reading about  separation and disaggregation and am not sure whether this will apply, although I think the services she will be providing from the Ltd company will, initially be different from her current self-employment, but I'm concerned about the transferring over time.

Her new services are also likely to take her overseas which is fine but her husband mentioned a family trip to Australia during which she will be working and her flights/hotel and I am concerned about the wholly and exclusively business.  Would she be able to claim her flights and the hotel for the number of days she would be required for the work or would the flights have to be apportioned because they will be staying longer and, presumably her husband will be sharing the hotel room.

I'm just really wondering what I should be discussing with her on Monday before deciding whether I want to do this or whether it would be more trouble than its worth.

Any help would be appreciated.



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Wella


Expert

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Posts: 1863
Date: Wed Feb 22 09:53 2012
 

Hi Sheila

To me it sounds like disaggregation. As she will be contoling both businesses. It would also be like splitting business into two and running it by two seperate individuals so that VAT registration isn't required

http://www.hmrc.gov.uk/manuals/v1-28part2bsect63-93.pdf

the first section 63, seems to cover this but i have not read it fully

As for the trip there is definately a duality of purpose which will mean that all expenses are dissallowed. BIM37610 specifically gives an example of a combine business trip and holiday.

http://www.hmrc.gov.uk/manuals/bimmanual/BIM37610.htm

HTH

Bill



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Dangermouse


Veteran Member

Status: Offline
Posts: 82
Date: Wed Feb 22 11:03 2012
 

There is a thread in here somewhere specifically asking about flights and when there is a personal element to it. If there is a search (despite number of posts, I haven't been here long), try flights or holiday as keywords. I think the summary was that if any personal time was included it cannot be tax deductible. Visiting a relative while on a business trip was about the limit. If the trip was extended for a holiday and the extra paid personally, then the whole trip became disallowable.

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pDm


Senior Member

Status: Offline
Posts: 145
Date: Sun Feb 26 15:34 2012
 

The holiday example is exactly the same one they use at the HMRC training day (and there's another one about uniforms and logos).

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Shamus


Forum Moderator & Expert

Status: Offline
Posts: 4058
Date: Sun Feb 26 16:08 2012
 

Sorry, missed this one when you posted R:)

I know the post that you mean although there were several similar one's at the time not far appart which is probably why the whereabouts of that one didn't stick out.

I think that this is the one that you were thinking of :

http://www.book-keepers.org.uk/t43133331/allowable-expenses/

HTH,

Shaun.

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