Setting up as a Consultant

S

Sweetpea

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Hi there,

I'm currently a self-employed lawyer and now setting up as a consultant providing consultancy services to a legal firm on the side.

I will be earning circa €35k as a consultant, so less that the VAT threshold.

Is it better to classify the consultancy as a separate trade for Y tax and VAT purposes?

Thanks very much for any replies.
 
In principal you could class them as two trades but they are so similar it might be hard to differentiate.

The two trades are combined for VAT purposes as they are similar so I'd imagine that you will have to change VAT.

Are you considering a company for the consultancy? At that level more hassle than it's worth?
 
Joe_90 said:
In principal you could class them as two trades but they are so similar it might be hard to differentiate.

The two trades are combined for VAT purposes as they are similar so I'd imagine that you will have to change VAT.

Are you considering a company for the consultancy? At that level more hassle than it's worth?
Click to expand...

Thanks for your reply.

No, agree its not worth setting up a company at that level.

The legal services i would be providing as a a consultant would be quite different, albeit its still legal services i'm providing. It would be much easier to operate it a s a separate trade.
 
Would be surprised if you could get away with this in terms of avoiding the VAT threshold. Would seem to be broadly similar to a shop trying to classify all it's differing products as separate businesses!
Anyway a quick call to your accountant should clarify the issue for you!!
 
All good - but would the legal firm not already be VAT registered and so would recover any VAT?
The issue on the threshold as I understand Revenue is that they look at a 12 month period and the torture in that approach is that it
is a rolling 12 months. If you go over the limit VAT is accountable on ALL of it not the excess.
I think both our correspondents suggest (and I agree) that the separation of trades I don't think works because each of them are 4th schedule services and but for the limit VAT would be chargeable.
 
44brendan said:
Would be surprised if you could get away with this in terms of avoiding the VAT threshold. Would seem to be broadly similar to a shop trying to classify all it's differing products as separate businesses!
Anyway a quick call to your accountant should clarify the issue for you!!
Click to expand...

Thanks and i agree, reluctantly!

If i charged VAT, Could the legal firm deduct the VAT themselves?
 
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