Will FHL be liable to Vat

Our clients have traded as a Vat registered building repair partnership for many years. The husband and wife have purchased a residential property which is going to be let upon a residential basis, indeed this is outside the scope of Vat. They are intending to jointly purchase another residential property and the wife will likely operate this as a Furnished Holiday Let herself. Our concern is that as she will be managing this herself (as a separate legal entity) that the rents may immediately be subject to Vat due to the current registration of the existing Partnership. We see this as a distinctly separate form of business and as she would be undertaking all aspects of managing this herself that it should not be subject to Vat

Hi,

As long as the wife is trading as a separate legal entity and the business is entirely separate to the one they run as a partnership, then this entity will be treated separately for VAT purposes and would only have to register for VAT if the legal entity breaches the registration threshold.

You can find guidance on the separation of businesses here:

Statement of Practice 4 (1983)

Thank you.