VAT-Registered Sole Trader running a Second business

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    Question

    I am the sole trader trading as a graphic designer. I am voluntarily registered for VAT and I have several commercial clients who are also registered for VAT. Due to the coronavirus outbreak, my graphic design business is very quiet, so to supplement my income I want to buy and sell bicycles to private individuals. Can I run the bicycle business as a different non-VAT-registered business whilst keeping the graphic design business registered for VAT?

     

    Answer

    HMRC’s VAT Registration manual at VATREG02200 states that ‘In all cases, it is the person (natural or legal) rather than the business which is registered, so a trader must take into account all their business activities’. Therefore, in your situation, it may be beneficial to deregister the graphic design business for VAT purposes. You can always re-register as and when this side of your business picks up again.

     

    in Monthly Tax Q&A
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