I operate an IT consultancy business under the structure of UK VAT registered Limited Company. There is at least one side project of my own I would like to work on between client projects, that will generate income through subscriptions. The project is based on Sports Performance and Coaching, i.e. has nothing to do with my day to day work as an IT contractor.

Am I better to create a new Limited Company at all for the project? Should I utilise my current Limited Company structure for generating invoices and charging VAT and potentially move the project to another company at a later date?

The concerns/queries I have are around is it best to decouple the IT consultancy business from the project business from day one. Will this be seen as VAT avoidance in the eyes of HMRC?

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