Commentary

V7.189D Disaggregation—motive to avoid paying VAT

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.189D Disaggregation—motive to avoid paying VAT

Part V7 Tax planning | Commentary

V7.189D Disaggregation—motive to avoid paying VAT

A key phrase in the legislation at para 2 is 'resulting in an avoidance of VAT' (VATA 1994 Sch 1 para 2).

Consider the following examples.

Example 3

Mary and June share the premises of a unit in a local village, running a health food shop. They both trade as separate legal entities, and neither is VAT registered. Their combined turnover is £81,000 per year. Mary sells organic fruit and June sells organic vegetables (all take-away sales). They maintain that the reason for keeping their businesses separate is because Mary has a high level of expertise in

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