Sole Trader starting 2nd business??

Bow

Hi all,
My husband registered as self employed last year and started a business (Consultancy) as a sole trader. The business has had interest and he has made a small profit in the first year. Thing is he has had an idea about possibly starting up another business in the same field but offering other services than just consultancy which seems to scare a few people off. He started the first business using his own name but is wanting to give the second business a company name. Is there any rules or regulations he needs to follow?
eg. (hubby name) XXXX Consultant business 1

green assistance business 2

Will he need to register the second business? He's not VAT registered as neither business is expected to reach the 67k mark.

I helped him do his SA this year. It was fairly straight forward as we keep all reciepts, books and other bits upto date.
I believe we would need to do this seperately for the second business? He has a personal bank account where all his business income is paid into. Would it be ok to have income from both buisinesses paid into this same account? It would be easy for us to identify which payments were for which business based on the payment.

Sorry to waffle on i just don't want to miss something and end up in trouble.

Thanks in advance for any advice

steve1980

You don't register the business, you register yourself. When he does his tax return you can enter as many businesses as you want.

As for the bank account, it should be a business bank account for each business. Not a personal one. Imagine the hassle should HMRC want to inspect his bank accounts.

"No sir, that was for the shopping, not the business"

It's a minefield and should not be done.

The VAT threshold is £76k, not £67k so unless he is selling to businesses then I wouldn't bother registering at all.

Bow

Thanks for the fast reply

So as he is already registered as self employed then he needs to do nothing more? Just set up another website with a new business name and away he goes?

As for the bank account it is solely used for his business. Receiveing Payments from customers.

Sorry if i'm asking the same question twice but i want to be sure he's doing everything right.

chalkie99

Couple of things to clarify.


The correct VAT threshold is £73,000.

He can be Hubby trading as Consultancy Business 1 and also Hubby trading as Green Assistance Business 2 but, as a sole trader, he has only one VAT "allowance". So, if the two businesses have sales which TOTAL over £73,000 he will have to register for VAT.

If he is dealing with businesses which are, themselves, VAT registered though then it might well be worth him registering himself, voluntarily.

Banking cheques might be a problem as customers will probably make out cheques to one or other of the trading names and if they don't match the account details they won't be accepted.

texranger

if his bank finds out he is using his personal bank account (even if only business dealings go through it) they could close the account and could even make you pay bank charges from the time the account was setup as a business bank account after an initial free banking period is chargable on credits and debits.

InsideInsurance

He can have a trading style for his second "business" but on any formal documents he will have to state " His Name t/a The Business Name". This will have to include contracts, his website, invoices etc.

That said it can be in the "small print" at the bottom of the page and doesnt have to be part of the logo etc.


Legally there is only him and so he is under no obligation to separate anything as it is only for his convenience that he is doing it. Though a business account would allow him to accept payments in the name of his business.

For any thresholds (such as VAT) all the revenue would be counted as one.

If he were to start establishing limited companies for these activities then both he and his business would be two separate legal entities and each having its own tax thresholds etc. But then they must have their own accounts etc as you and the business are then not the same thing and taking the business money would effectively be theft without it being as part of formal pay, dividends, directors loan etc.

texranger

InsideInsurance wrote: »

He can have a trading style for his second "business" but on any formal documents he will have to state " His Name t/a The Business Name". This will have to include contracts, his website, invoices etc.

That said it can be in the "small print" at the bottom of the page and doesnt have to be part of the logo etc.


Legally there is only him and so he is under no obligation to separate anything as it is only for his convenience that he is doing it. Though a business account would allow him to accept payments in the name of his business.

For any thresholds (such as VAT) all the revenue would be counted as one.

If he were to start establishing limited companies for these activities then both he and his business would be two separate legal entities and each having its own tax thresholds etc. But then they must have their own accounts etc as you and the business are then not the same thing and taking the business money would effectively be theft without it being as part of formal pay, dividends, directors loan etc.

another way to do it is

XXXXX Group incorporating XXX1 Business, XXX2 Business

this is how i run my business with business bank account, VAT, DPA all under XXXXX Group