Coffee Shop Trade – Should It Be Limited? What’s The Risk?

By Tim Corfield


George and Mildred retired in their late fifties. They had done well and invested most of their pension into a coffee shop. They discussed with their accountant whether the trade should be a sole trade, partnership or a limited company.

“What could go wrong with such a simple business” their financial adviser had said to them. So, they decided to trade as a partnership.

Fast forward ten years a VAT inspection and Covid 19. “We’ve not intended to do anything wrong” said George after telling me that the partnership has now been assessed with £60,000 VAT. Prior to Covid it may have been possible to sell the business, but now?

Which leaves George and Mildred’s house very much in the firing line. There’s around £150,000 equity in this. A sale would mean uprooting and downsizing. Not something George and Mildred had planned at their time of lives.

HMRC are playing fairly hard on this case. The couple are going to have to sell their house to settle the debts whether or not through an insolvency process.

The truth is you never know what’s around the corner. Generally, as people get older, they become wealthier but also more risk averse. What is right for a 20 year old without any assets may not be right for a 60 year old in a different financial position.

A limited company may not have the tax advantages of a partnership but it does have other advantages.

Ask George and Mildred.

We will work with your clients to put together a plan of action if required in these testing times.


Call me Tim Corfield on 077869 65009, at any time, for a chat, or email Janet Peacock can also be contacted on M: 07545806531 email : or


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