Two Companies VAT Query

[stablemate]

Hi all, I appreciate this probably isn't the best place to ask this but with everything that's going on at the moment I figure if I can bother my accountant the least amount possible it's worth a try!

I am the sole director of two limited companies, both of which are VAT registered (separately so two different VAT numbers / sets of returns / etc). For all intents and purposes the two companies are completely separate from one another and the only thing tying them together is me as a common director.

Currently starting the process of closing "Company A" down. Can "Company B" buy stock and/or equipment from "A", provided this is declared properly on both VAT returns. So effectively I am owing the VAT charged from Company A on the sale, and claiming it back again through Company B? I'm not trying to pull a fast one as I'll obviously only be moving my VAT liability rather than getting rid of it. Is this an okay (and legal) thing to do?

Many thanks for any input!

[anonymous-user]

Can't see why not

Not sure that is the best way of doing it without more info

[Eric Mc]

Does the company share - same directors, same shareholders, same premises?

[stablemate]

Eric Mc said:

Does the company share - same directors, same shareholders, same premises?

Same directors and shareholders, but not the same premises no. The old company has/had premises but the new one is online / home office only.

[CDP]

Can't one company takeover the other or merge them?

[Eric Mc]

CDP said:

Can't one company takeover the other or merge them?

That's what I was getting at. The companies are not "to all intents and purposes separate". In law, they are looked on as Associated Companies as they share common control and ownership.

However, the surviving company should be able to take over the assets and stock of the ending company under the Going Concern VAT rules - which would obviate the need of one company declaring Output VAT on the disposal proceeds and the other having to reclaim the Input VAT.

Despite your reservations, I would definitely contact your accountant before you do anything.

[stablemate]

Thank you very much for that - I shall do just this. Was hoping it would be an easy one but it appears there are options.

Thanks all for your input

[CDP]

Eric Mc said:

Despite your reservations, I would definitely contact your accountant before you do anything.

This

A mistake here could be extremely costly.