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Posted Thu, 04 Jan 2024 15:34:00 GMT by
Hi all! Right, I own two limited companies that do two different things. One is a surveying company and the other is a property maintenance company. The surveying company is VAT registered while the property maintenance one currently isn't as it's relatively new (though this will be registered when necessary). Can I offer the services of one of my companies to the clients of my other company and vice versa? My client base for both is very similar. I would like to, at the point of initial contact via email to be able to promote my other company thus hopefully gaining work for the other. Basically, the client books me for a survey. Can I then turn around and say, oh by the way, I own a property maintenance company, would you be interested in the details? Both companies share the same 3 directors. Everything else about them is totally separate, accounts, addresses, staff, websites, emails, social media, phone numbers etc. Does this have any tax implications or am I breaking any laws in doing this? I am currently being told that in order to do this, I would have to set up a holding company above my current two. I'm not against doing this, I just don't see it as necessary as I'm not trying to avoid paying anything. If one company is referring to the other, I will still be paying the correct tax and VAT in my eyes. Thanks in advance.
Posted Wed, 10 Jan 2024 15:33:14 GMT by HMRC Admin 20 Response
Hi Micky Dean,
The overriding importance is that the VAT is accounted for correctly by the companies concerned.
There isn't a VAT issue involved with companies collaborating and recommending their customers to each other.
The only issue to be aware of is artificial separation where a company splits in order to avoid registering for VAT.
Please see the guidance below:
Statement of Practice 4 (1983)
Thank you.

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