This paragraph examines when businesses are to be treated as single or separate for VAT purposes. In particular it covers:
- Ìý
•ÌýÌýÌýÌý the status of businesses carried on by related or connected persons
- Ìý
•ÌýÌýÌýÌý business splitting/disaggregation
For an overview of VAT and business more broadly, see V2.201B.
Businesses carried on by related or connected persons
Problems may arise where businesses or the persons carrying on businesses are related in some way. It may be difficult to determine whether a single person is carrying on one or more businesses, or whether a number of persons are carrying on one or more businesses. This question is likely to arise, in the main, where goods or services are supplied directly to a person who is unable to recover any VAT which may be chargeable. Predominant in this category is the retail sector (as illustrated, for example, in SN Khan1).
Example
X is a hairdresser with a turnover of £90,000. They are therefore required to be registered for VAT, and
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