Was there a single trade or two businesses in place?

The taxpayer’s main trade was as a plasterer but he also carried out liquid floor screeding. He was a sole trader until 2013 but then formed a partnership with his wife for the screeding. The aim was to separate the businesses so that only the partnership was VAT registered even though its turnover was under the threshold. This allowed it to claim the input tax on materials. However the plastering business was not registered and this allowed the taxpayer to offer his customers lower rates than would be the case if he had to add VAT.

HMRC said there had only ever been a single sole trader business and the combined turnover of both activities required a retrospective registration date of 1 March 2013. The taxpayer appealed.

The First-tier Tribunal was satisfied that there were two businesses. Further the activities each had different customer bases in different locations. The taxpayer...