A: Unfortunately not.
Incorporating is essentially just taking over the Sole Proprietor's business. Per para 3.8 of 700/1 and VATREG29250, if you take over a business from someone who was, or was required to be, VAT registered, you adopt their turnover. So since in this situation the turnover of the sole proprietor in the 12 months before the transfer was over the VAT registration threshold, the Ltd Co is required to be VAT registered from day 1. Steps will also need to be taken to register the Sole Proprietor.
The threshold only starts from zero again if you take over a business from someone who is not VAT registered and is not required to be. However, care should be taken not to repeatedly do this as HMRC could view it as abusive and take action against it.
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