What VAT rate for online directory

rosshennessy

Ive recently launched an online directory only for qualified Irish Herbalists www.bluherbal.ie and because I have 2 other soul trade businesses registered for VAT I have to charge VAT on this business. Initially I was told the rate was 9% which it is for all printed directories. But now Ive been told its 23%, IS this correct?
The business isn't viable at this rate right now due to the pricing structure and small group that will use the subscription. So is my only option to put the business in someone else name who isn't registered for VAT and doesn't earn above the threshold??
What other options do I have???
Trading as a limited company will involve expensive accounting each year..

Alan Shore

Where does you income come from. Is it adverting and membership from herbalists to advertise on your website.

If so your are selling advertising space on a website which is standard rated.

If its a members based organisation then there may be a question whether its a business or representative organisation which may have a different VAT treatment.

So is my only option to put the business in someone else name who isn't registered for VAT and doesn't earn above the threshold??

Could not possibly comment on that.

rosshennessy

Yes when it comes down to it its advertising, as each member has the option of filling out a profile page which promoted their clinic. Thanks for clarifying that, Ill just have to change it to a Ltd. company to avoid the VAT. Don't have much other options do I?

Thanks

nompere

There's a discussion in the Taxation forum on VAT business splitting - to which I contributed quite a lot, and which I'm not going to repeat:

http://www.boards.ie/vbulletin/showthread.php?p=67889030

Revenue can and will group businesses to prevent the attempted manipulation of VAT thresholds.

Alan Shore

Hi nompere,

Is there any relief where the nature of the businesses are not related. I accept that where a person puts the same type of business eg a hairdressers into a sole trade and a company no doubt it would be challenged but if one business was plastering and the other selling shoes.

nompere

Probably - in my longer post in the earlier thread I looked at the possibility of a tax consultant who also had a catering business.

This is a short extract from http://www.revenue.ie/en/about/foi/s16/value-added-tax/chpt-09/09-16.pdf?download=true

This allows the Revenue to compulsorily group register inter-linked persons who are manipulating the system (e.g. the scenario of the manufacturing company and the supplying/installing company operating in such a way that one company gets VAT repayments while the other reneges on paying its VAT liability). With effect from 2/4/07 (Finance Act 2007) the right of groups to apply to be registered has been explicitly recognised in law.


I corrected one grammatical error in that extract!