What is wrong with the following?

[blindswelledrat]

I'm a little curious here.
Someone I know owns a limited company. He trades as the limited company, invoices as the limited company-and as far as I know bills/reclaims VAT as the limited company.
However- he files his accounts (or tax returns) as a partnership.
Now presumably the reason he does this is to gain the protection of the limited company if everything went tits-up but get the tax efficiency of the partnership.
This can't be legal though surely?
What are the possible consequences of him doing this?

[Plotloss]

LLP?

Isnt that a bit of both? Limited liability but still a partnership?

[blindswelledrat]

Except his company isn't one though. In effect that's how he is trading but without the status.

[andyps]

I trade as a VAT registered limited company and also as a non VAT registered sole trader, the two things doing slightly different activities which can be clearly differentiated should HMRC ever ask. Maybe it is legitimate how he operates, but it would need explanation - is the partnership VAT registered for example, is there really a limited company? If not to the latter, but letter heads etc say it is then it is not legal as far as I know.

[blindswelledrat]

No, he is definitely not doing it legitimately. I am not certain of VAT status though.
At the least, he is purporting to clients that he is a limited company where he is actually a sole-trader (a corporate image thing I suppose).
I think it is more likely, however, that he is trading as a limited company entirely yet filing tax returns as a sole trader.

[blindswelledrat]

blindswelledrat said:

No, he is definitely not doing it legitimately. I am not certain of VAT status though although he is definitely charging/paying VAT from one source.
At the least, he is purporting to clients that he is a limited company where he is actually a sole-trader (a corporate image thing I suppose).
I think it is more likely, however, that he is trading as a limited company entirely yet filing tax returns as a sole trader.

[Plotloss]

Companies Act 2006 requires him to declare registered offices and the like on corporate communications if he is Limited.

[blindswelledrat]

Yes, he is doing that. Any corporate communications take the form of standard company i.e. letterhead with registration number and registered office etc. but he is definitely filings accounts as a 'non trading' ie dormant company ergo must be accounting as a partnership.

[Mattt]

http://www.shopthem.com/ [/Vesuvius996]

[Simpo Two]

I suppose that if he's the employee (in this case a director) of a limited company then he could also be a partner in another company?

[blindswelledrat]

Simpo Two said:

I suppose that if he's the employee (in this case a director) of a limited company then he could also be a partner in another company?

Yes he could. But we are talking about the same company here. The same company cannot be two different legal identities, one for condicting business and the other for tax.