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Question about having to set up a separate company

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  • 28-06-2020 8:40pm
    #1
    thomasjad
    Registered Users Posts: 342 ✭✭


    Hi all,

    Let me explain: I have a limited company that's going well. It's in a industry that is VAT exempt. Now myself and my business partner have an idea for a website that would offer services that's entirely separate from our current business, this itself would not be VAT exempt. My question is would we need to set up a new limited company for this or is there some other way of doing this so that we don't have to go messing around with the VAT exemption? Now that I think, the corporation taxes would be different rates as well.

    If we do have to set up a separate limited company can the current limited company loan the funds or be a share holder?


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    #2
    Happy4all
    Closed Accounts Posts: 2,089 ✭✭✭Happy4all


    thomasjad wrote: »
    Hi all,

    Let me explain: I have a limited company that's going well. It's in a industry that is VAT exempt. Now myself and my business partner have an idea for a website that would offer services that's entirely separate from our current business, this itself would not be VAT exempt. My question is would we need to set up a new limited company for this or is there some other way of doing this so that we don't have to go messing around with the VAT exemption? Now that I think, the corporation taxes would be different rates as well.

    If we do have to set up a separate limited company can the current limited company loan the funds or be a share holder?

    A company can be registered and supplying for both taxable and exempt services. No problem with that.

    Why would the CT rates be different?


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    #3
    thomasjad
    Registered Users Posts: 342 ✭✭thomasjad


    We have non trading income as well so higher CT rate.

    Just trying to get a clear picture in my head. For the revenue we make from the website related activity is there a way to have this in a separate bank account/accounts. We'd like to try keep expenses and revenue separate if it all possible.


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    #4
    y0ssar1an22
    Registered Users Posts: 17,043 ✭✭✭✭y0ssar1an22


    you can run both activities through the same company.

    re the CT, on the CT1 you would declare the 2 income streams on that and taxed at their applicable rate.

    you could have 2 bank accounts to keep the transactions separate - just be sure your invoices have the correct details. you could also start claiming a portion of the 'old' vat such as light/heat/phone/internet bills. The general expenses that would apply to both streams. Based on % of turnover is a fair way to apportion i reckon.

    there are also the vat thresholds to think about. you may not reach the threshold initially.

    then there are other considerations: cost of having to produce 2 x sets of accounts.

    for liability reasons you may prefer to have 2 separate entities.


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