The £85,000 limit applies to each person: a sole trader, a partnership or a limited company.
If you want to get the benefit of multiple VAT thresholds, here are some tips.
If you are a sole trader, and want to diversify in to perhaps furnished holiday lets, put the latter in joint names. Otherwise, the FHL income is aggregated with the sole trade income in determining if you have exceeded the VAT threshold. The same applies if the sole trader is already VAT registered so that VAT is not charged on the FHL income.
But, if the property is to be rented out, and therefore exempt for VAT, then you may want to have it in the same name as the sole trade. You can then utilise the de minimus rules and perhaps reclaim the VAT on property expenses for the rental property.
This is only possible if the property input tax is less than £7,500 per VAT year and the sole trader turnover exceeded the rental income.
Partnerships with different partners are treated as different persons from a VAT perspective and Each would get their own £85k registration limit. The key issue is that the partnerships are not identical in terms of named partners.
If a client had two companies, then they would be two separate persons from a VAT perspective. Common control is irrelevant.
So, if you really don’t mind the extra admin, and you are not guilty of “business splitting” the you can have multiple businesses all below the vat threshold.
Just something to think about…