UK Tax Questions? Ask a UK Tax Advisor for answers ASAP
You cannot both be sole traders as you are working together towards the same end goal so are partners and should be operating as such.
So no your partner is wrong the whole position is subject to VAT and should be so within the whole of the profit position - and he then take his share of the partnership profits.
How you are trading is wrong in the eyes of HMRC and this needs to be rectified- you are artificially separating the business both for tax and VAT purposes
Please advsie if I can assist further
Thanks for your response
Yes I am sure - as the fact you share profits indicates a partnership and not you asking for professional assistance from a separate business.
If one took the lead and then paid just fees to the other and that you offered different services to all your clients then maybe you could be treated as separate businesses but this does not appear to be the case here or you need to restructure the way you operate so there is a separation of business.
But currently the way in which you operate all is subject to VAT - you cant charge some and not all
I cannot give you that answer re the VAT as you are not operating as you should with this specific venture, all I can do is advsie you how you should be operating, and on that basis advsie that VAT is due for the services you supply.
If I did not highlight the way you are operating as incorrect for both tax and VAT purposes, I am sure you can appreciate that would make me an ineffective tax adviser!
The way you are operating is tax and VAT evasion, I cannot say more than that. I have answered the question and given you advsie re the VAT based on how you should be legally structured.