Good & Bad news from Mr & Mrs Backyard Bullion

[Pete]

5 minutes ago, HelpingHands said:

Would it be legal to have two companies both under the VAT threshold?

One for production and one that buys from the other one to sell?

If you check Companies House you will come across many directors at the same address with similar sounding company names.
For illustration ( these are made up names )  J.S. Smith Ltd; JS Smith Ltd; J.S. Smith ( UK ) Ltd - all trading at the same address under different Company numbers.
I suspect that the primary reason is to keep each business under the VAT registration threshold.

I am no expert so my opinion is merely a suggestion or what I would do in a similar situation.
If you had a production company (A) that sold to your other company (B) at a very low margin - for example cost plus, and your company (B) sold and marketed the product with your required full margin then that would seem reasonable.
Company (A) - dirty - buys raw materials, uses energy, workshop, tools and consumables etc.
Company (B) - clean - incurs time & costs in promotion, telephone, office space, computer, packaging & shipping etc.
If Company (B) also traded some mint bullion and other services then that would possibly help in the differentiation of the two.
Also you could consider splitting the production company (A) into say (A1) producing poured bars and (A2) custom jewellery or other products that require more post-processing.

Best of luck in your ventures

 

[BackyardBullion]

27 minutes ago, Pete said:

If you check Companies House you will come across many directors at the same address with similar sounding company names.
For illustration ( these are made up names )  J.S. Smith Ltd; JS Smith Ltd; J.S. Smith ( UK ) Ltd - all trading at the same address under different Company numbers.
I suspect that the primary reason is to keep each business under the VAT registration threshold.

I am no expert so my opinion is merely a suggestion or what I would do in a similar situation.
If you had a production company (A) that sold to your other company (B) at a very low margin - for example cost plus, and your company (B) sold and marketed the product with your required full margin then that would seem reasonable.
Company (A) - dirty - buys raw materials, uses energy, workshop, tools and consumables etc.
Company (B) - clean - incurs time & costs in promotion, telephone, office space, computer, packaging & shipping etc.
If Company (B) also traded some mint bullion and other services then that would possibly help in the differentiation of the two.
Also you could consider splitting the production company (A) into say (A1) producing poured bars and (A2) custom jewellery or other products that require more post-processing.

Best of luck in your ventures

 

This is very common I have no doubt. 

The issue is that this would not actually help with the VAT threshold - because the bottom line is that my turnover has exceeded the limit for selling the product I make!

What it would help with is you could have Backyard Bullion Ltd as the selling company for hand poured silver, then I run as a sole trade for coins only - this would mean that I could split the turnover of both entities. 

But again, the volume of hand poured silver alone is an issue - so multiple Ltd companies buying the same stock, selling the stock to split it up and stay under the threshold?

That would mean 3 sets of company accounts each year + all the other costs associated with running a Ltd company. No thank you!

Also, it seems morally grey at best and down right tax evasion at worst!

Also - registering as a Ltd company puts my personal details out there for all to see, bye bye what degree of anonymity exists in today's world. 

Mrs BYB said a very true thing the other day, if the small price increase we have implemented across the board slows things down a bit, that is a good thing because we are so busy at the moment it is hard to catch our breath! 

[sovereignsteve]

you'll be employing staff next. the slippery road............

[Goldhooked]

1 hour ago, HelpingHands said:

Would it be legal to have two companies both under the VAT threshold?

One for production and one that buys from the other one to sell?

It would likely be known as artificial separation and be in serious trouble with HMRC.

I looked in to it several years ago when I had to VAT register.  To make it work, the two businesses would really have to work from completely separate premises and not share any resources at all.  Even then I believe there has to be a good reason for the split - if the only reason for the split is to avoid VAT then it’s probably not allowed.

There was a case where a husband and wife ran 2 separate and different businesses (can’t remember details but something like carpenter and caterer) but because they were run from the same premises and shared resources, HMRC deemed them as one entity for VAT purposes.  They lost an appeal.

[BackyardBullion]

2 minutes ago, Goldhooked said:

It would likely be known as artificial separation and be in serious trouble with HMRC.

I looked in to it several years ago when I had to VAT register.  To make it work, the two businesses would really have to work from completely separate premises and not share any resources at all.

There was a case where a husband and wife ran 2 separate and different businesses (can’t remember details but something like carpenter and caterer) but because they were run from the same premises and shared resources, HMRC deemed them as one entity for VAT purposes.  They lost an appeal.

I also read about this case study - it is so hard to prove that they are two different entities. 

[Goldhooked]

Just now, BackyardBullion said:

I also read about this case study - it is so hard to prove that they are two different entities. 

In the end I decided it’s not worth the risk.  Becoming VAT registered actually gave us a kick up the butt to expand further.  We couldn’t increase our prices to compensate for the VAT element as it would have made us uncompetitive.  So for a while our profit decreased until our turnover grew to a certain level.  The incentive to increase turnover was certainly there!

[JaggyThistle]

massive congrats and may you from from strength to strength and us brits are use to paying VAT on practically everything  being collectors coins does that make then 5% vat or still 20%vat  ( or is that just for imports - Tax , VAT customs, Import Duty makes my head spin and im not in business  )  . I never hear of a poor accountant so a good one will be worth their weight in Gold and silver 

and to be honest I thought VAT was already paid on the items

I am going to ask another daft scotman question  does the trade sales in TSF now have to comply with HMRC and have VAT paid on them or is that a not affected as its a private sale 

again many congratulations and I look forward to hearing one day of your Millionth pound sale

 

Jaggy

[BackyardBullion]

7 hours ago, JaggyThistle said:

massive congrats and may you from from strength to strength and us brits are use to paying VAT on practically everything  being collectors coins does that make then 5% vat or still 20%vat  ( or is that just for imports - Tax , VAT customs, Import Duty makes my head spin and im not in business  )  . I never hear of a poor accountant so a good one will be worth their weight in Gold and silver 

and to be honest I thought VAT was already paid on the items

I am going to ask another daft scotman question  does the trade sales in TSF now have to comply with HMRC and have VAT paid on them or is that a not affected as its a private sale 

again many congratulations and I look forward to hearing one day of your Millionth pound sale

 

Jaggy

Thanks my friend 😉

The question of whether any and all sales I make involving silver and whether they are now VATable is a very interesting one.

I will be starting a new thread on this at some point soon, because it is a very important topic for any and all sellers to consider.

The overarching question will be relating to badges of trade and whether it is a capital gains sale or part of trading. If it is part of trading then that is potentially bad for for me, VAT is due and then income tax too!

So a capital gains tax exempt Britannia suddenly becomes heavily taxed!

More to follow next week

[FrozenMojito]

On 02/04/2019 at 20:00, Noraa25 said:

A good accountant is worth every oz

I agree with this statement. When I became a freelancer I rather vainly thought "I'm a smart chap, how hard can it be". A couple of quarters and painfully compiled VAT returns later I realised that I am an idiot and accounting is something best left to professionals. I got a recommendation and in the first meeting with the accountant I discovered that the returns I had made so far bore little semblance to reality,  and they gave me information that basically saved me more money than their annual fee.

Now they handle my business accounts and also the personal accounts of both my wife and me. Also I get to tell people that I have an accountant, which sounds very grown up.

 

[BackyardBullion]

 

[Mike]

Congratulations (???) Mr & Mrs BYB - I have a slightly technical question...today, when you buy the silver (I don't know how you acquire this) to make your hand poured silver, do you currently pay VAT on it or do you acquire it from the EU VAT free? I am assuming the latter, as if its the former, you gain input VAT relief on the raw material purchase.  

A good accountant is worth their weight in hand poured silver, not just to make sure that you are as efficient as possible from a tax/VAT perspective, but also to make sure your record keeping top notch - A VAT audit is a very different beast to a standard HMRC tax audit

[Mike]

On 04/04/2019 at 16:15, Pete said:

If you check Companies House you will come across many directors at the same address with similar sounding company names.
For illustration ( these are made up names )  J.S. Smith Ltd; JS Smith Ltd; J.S. Smith ( UK ) Ltd - all trading at the same address under different Company numbers.
I suspect that the primary reason is to keep each business under the VAT registration threshold.

I am no expert so my opinion is merely a suggestion or what I would do in a similar situation.
If you had a production company (A) that sold to your other company (B) at a very low margin - for example cost plus, and your company (B) sold and marketed the product with your required full margin then that would seem reasonable.
Company (A) - dirty - buys raw materials, uses energy, workshop, tools and consumables etc.
Company (B) - clean - incurs time & costs in promotion, telephone, office space, computer, packaging & shipping etc.
If Company (B) also traded some mint bullion and other services then that would possibly help in the differentiation of the two.
Also you could consider splitting the production company (A) into say (A1) producing poured bars and (A2) custom jewellery or other products that require more post-processing.

Best of luck in your ventures

 

VAT Groups come into play here, whereby HMRC look through the individual company structures and treat your turnover as Group for VAT eligibility.  However, if one of the companies was registered in IoM, Jersey, Guernsey etc this wouldn't apply - just saying....I know many contractors that have offshore shell companies that they trade through to minimise tax impacts, all legal, but slightly complicated to set up

[sixgun]

On 04/04/2019 at 16:45, BackyardBullion said:

Yes - esentially as a sole trader your £85,000 threshold applies to all businesses you run as a sole trader. There are some ways around it - but the two businesses have to be very separate and very different usually. 

Why doesn't Mrs Backyard Bullion becomes a sole trader? 😜

Do let the pirates get you. 🏴‍☠️

[BackyardBullion]

4 minutes ago, sixgun said:

Why doesn't Mrs Backyard Bullion becomes a sole trader? 😜

Do let the pirates get you. 🏴‍☠️

I think we covered this earlier in the thread, it wouldn't work. 

[sixgun]

6 minutes ago, BackyardBullion said:

I think we covered this earlier in the thread, it wouldn't work. 

It strikes me it could work - indeed i expect it would work. What is the case you refer to?

i see this case here - July 2017 - Husband and wife acting separately as sole traders are separate entities - so they were dealt with as separate entities for VAT.

https://www.saffery.com/news-and-events/press-releases/2017/17-july-vat-rules-for-spouses-operating-separate-businesses-under-same-roof

[BackyardBullion]

36 minutes ago, sixgun said:

It strikes me it could work - indeed i expect it would work. What is the case you refer to?

i see this case here - July 2017 - Husband and wife acting separately as sole traders are separate entities - so they were dealt with as separate entities for VAT.

https://www.saffery.com/news-and-events/press-releases/2017/17-july-vat-rules-for-spouses-operating-separate-businesses-under-same-roof

It is not really something we want to ever have to argue in court!

Especially as a fair amount of evidence might come from this thread were people suggest we do it to specifically avoid registering!

[sixgun]

10 minutes ago, BackyardBullion said:

It is not really something we want to ever have to argue in court!

Especially as a fair amount of evidence might come from this thread were people suggest we do it to specifically avoid registering!

This is what i suspected. i see it as my right if not a duty and obligation to avoid paying as much tax to this criminal cartel as possible. Avoiding paying taxes is a legal right. These taxes are unlawful in the first place.

[Oldun]

If you state as fact they are unlawful, you should take the government to court. Or has it already been done multiple times and the entities have lawfully lost ?

[sixgun]

48 minutes ago, Oldun said:

If you state as fact they are unlawful, you should take the government to court. Or has it already been done multiple times and the entities have lawfully lost ?

This is the difference between law and legislation. Legislation is rules for legal entities. Law is for man (and woman). Government is a legal entity and so is blind to law.

There is no law that obliges man or woman to pay tax. Please find me the law if you disagree. You may find some legislation but this will deal with the person or persons - persons is the plural or the person - a legal entity. It is not people. Why does legislation not talk about people? People are not legal fictions - they are men and women.

Tax is a declaration of slavery. You work and you are forced to pay this government entity tax (GBP - you must pay GBP). There are legal rules about this. If you do not hand over the product of your labour you will be kidnapped and put in a cage. You will be put before the money system hearing (aka court - not really court i am making a bit of a joke). You will be charged - so there is a debt. Those called to the bench - the bankers' bench - the bankers (aka those acting for the Crown (City of London) and members of the BAR franchise of the City of London) will decide what will happen with this debt. You work under NI numbers and tax numbers - the government demands a share, or is it they allow you to keep some of it? The government decide how much it will take - you can use the rules but you do not get to make the rules. You have no say - you must give the government what they say is their share - you are a slave.

Entities cannot lose anything lawfully or unlawfully - they are entities - the law is for man and woman. Entities are legal fictions which people believe they are and part of the control system. i am not an entity - it sounds like a bug or Dalek or some such - certainly not man or woman.

[Oldun]

The onus is on you to provide evidence, otherwise it is opinion. Until then, everything you say on this topic remains opinion. Not interested in a conversation about this. Please provide facts to support your opinion.

[Oldun]

If you can provide something to support your opinion, I am more than happy to accept your opinion. A very simplistic search I did just now provided this link https://www.britannica.com/topic/tax-law but  please do not attack the link as a means of supporting your own opinion. Provide some evidence of your own  By doing so, we can all benefit from your earlier opinion more.

And of course, tax avoidance and tax evasion are different and should not be confused. Tax avoidance is the legal usage of tax laws to reduce the amount of tax burden.Tax evasion is, on the other hand, illegal.

[sixgun]

2 hours ago, Oldun said:

If you can provide something to support your opinion, I am more than happy to accept your opinion. A very simplistic search I did just now provided this link https://www.britannica.com/topic/tax-law but  please do not attack the link as a means of supporting your own opinion. Provide some evidence of your own  By doing so, we can all benefit from your earlier opinion more.

And of course, tax avoidance and tax evasion are different and should not be confused. Tax avoidance is the legal usage of tax laws to reduce the amount of tax burden.Tax evasion is, on the other hand, illegal.

There are no tax laws - you will only find tax legislation.

Putting up a link to encyclopaedia Britannica is not a citation of this 'tax law'. Legislation applies to persons - persons are not people or else they would talk about people. Go look at some legislation - it is all person or persons. What are they playing at? Persons are legal entities - a man or woman is not a legal entity. That is obvious - so obviously legislation is not about men and women.

It is plain to see a man is not a legal entity. A legal entity is something legislation creates - makes up - it is made up - it is a fiction - a legal fiction.

We are all equal under the law. If we are all equal no-one can tell me what to do - no-one can take my property without my consent - i do not give consent and yet it continues.

It is ABC obvious. So how do they get round this basic axiom of LAW that we are all equal. They create legislation and they create legal fictions. Let's say you are John of the family Smith. Your name is not John Smith. Look at your birth certificate - you will see your name is John. It is not John Smith. Smith is a surname - something on top of your name - it is on top [sur - French on] - it is separate - it is not your name - it is not you.

Your name is certainly not Mr John Smith. Mr is a title - it is not your name. A title is a status - a status is a rank - this is making one man above another but we are all equal so it cannot be law, it is a legal title, a legal status. But you have been told you are Mr John Smith and you believe it. Mr John Smith and certainly MR JOHN SMITH is not you, the man. MR JOHN SMITH is not Mr John Smith - they are actually different. Like anything on a legal form in a box is legally on another page. There are so many tricks you would think they are trying to trick you - and so they are. They trick you into believing you are a legal fiction. So you then come under legislation. All men and women are born equal under the law. So stuff shirted Mud Pies cannot create law which would dictate over other men and women - no man can make a law over another or we are not all born equal under the law. BUT Mud Pies can make legislation and if you believe you are a legal fiction it follows you come under the control of legislation. You make yourself a slave and work 25% of your life for the government. If you do not pay you will be punished - sounds like a Mafia protection racket. Well if you think hard enough with all the NI, income tax, duties, licences, council tax, VAT..... you actually end up working most of the time of the government. What are they doing with all this 'money?' - and still there is a deficit.

It is 1 2  3 logic - it is there in front of you - it is hidden in plain sight. You fill in the tax form of your legal fiction in all capitals - look at your tax demand it is all capitals - what are they playing at? All capitals is not a mistake it is your legal fiction - you believe this is you, that it is the man's tax form but there is no tax form for the man - it is a legal fiction's.

This is a big red pill step. A lot people just don't get it - [like they cannot fathom that the Federal Reserve is a private banking cartel.] The government has all the guns and the slaves pay. The elite have knowledge and avoid most of these taxes - only the slaves pay tax because they accept their slavery.

i do not want to hijack BYB's thread so i am leaving it there - some will be aware of what i am saying.

[UKStacker]

I understand your point, but if you wish to use the things that society provide, ie roads, hospitals, the telecom infrastructure to post on the internet. Then you must pay for it.

How much is reasonable is another debate.

[danmc82]

13 hours ago, UKStacker said:

I understand your point, but if you wish to use the things that society provide, ie roads, hospitals, the telecom infrastructure to post on the internet. Then you must pay for it.

How much is reasonable is another debate.

I provide a driveway for my postman to use, I dont charge him to do so though 😉

[Oldun]

Assuming the wink face means this is not a serious post.