Jay Cooke

Have a read of this HMRC guidance https://www.gov.uk/government/publications/statement-of-practice-4-1983/statement-of-practice-4-1983 You need to be careful around the VAT registered business reclaiming VAT on costs that are not wholly and exclusively used by the VAT registered business, for example if two business share the same premises...then the VAT registered business cannot reclaim all the VAT on rent or service charges or on utilities as clearly some of these costs are enjoyed by the other business. Remember the right to reclaim VAT is that the incurred VAT is used in making taxable supplies, that is not the case if the VAT registered business buys a laptop and reclaims the VAT but then uses the laptop in the unregistered business. So whilst there may not be disaggregation in the truest sense, HMRC could still enquire as to the VAT reclaimed by the VAT registered business.

You can call HMRC - VAT helpline or debt management unit - and ask them to post you a statement of the VAT account, that is a much easier to read document than the government gateway which has this stupid user interface where you can only see payments or only see receipts, but not both side by side (like they used to under the old gateway setup).

https://www.gov.uk/government/organisations/hm-revenue-customs/contact/vat-registration-applications-exceptions-and-changes "Write to HMRC if you have temporarily gone over the registration threshold and want to ask for an exception so you do not have to register for VAT. Address is BT VAT, HM Revenue and Customs, BX9 1WR, This is not as simple as it sounds, you need to include an explanation as to why you went over and why you will be below thereafter. HMRC will likely write back and ask you to disclosure your previous 12 months turnover and your projected 12 months turnover before HMRC are able to make a decision as to whether to grant exception or not.

Useful guidance here in HMRC internal manuals https://www.gov.uk/hmrc-internal-manuals/vat-taxable-person/vtaxper22000

See here for the rules https://www.gov.uk/hmrc-internal-manuals/vat-input-tax/vit32000 You can reclaim input tax pre-registration if you still have the items on hand/in stock (not already sold them). With regard import VAT, your right to reclaim import VAT is based on holding a C79 certificate. C79's are issued against a VAT number, so if you didn't have a VAT number until November 2023, how have you got C79's for imports before that date?

See here for VAT https://www.gov.uk/guidance/foreign-currency-transactions-vat-and-tour-operators See here for general accounting purposes https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim39510

You are going to need very robust and clear contracts that indicate you are acting as an agent in relation to the bookings and collections of funds for the franchisees and acting as principal in relation to bookings and income when relating to your own business. You're best off speaking to an Accountant or a lawyer to ensure the franchisee agreements protect you from HMRC thinking that all the money in your bank is your money. HMRC are not going to give you tax planning advice here or how best to structure your business. At best, could you not have a separate bank account/client bank account for the franchisee income so as to create some sort of separation between you and your franchisees? Useful read here from the ICAEW https://www.icaew.com/technical/tax/vat/vat-articles/three-vat-parties-explained Also HMRC internal manuals discuss the nuances here https://www.gov.uk/hmrc-internal-manuals/vat-taxable-person/vtaxper36500

Also worth noting is that are you selling directly to the consumer or are you selling via another platform like Google Play, Apple Store or Microsoft store? In those situations it is the store making the sale to the end customer and are responsible for charging VAT to the consumer, you would be only making a sale to the store (which is B2B).