Husband and wife small business accounts separate?

Charityworker

OK, I have a question. My husband is hoping to start as a self employed domestic cleaner soon and I'm hoping to start selling the broken costume jewellery I have been mending at craft fairs soon. Do we need to keep 2 separate account books or can we keep them in the same one?

Premier_2

Charityworker wrote: »

OK, I have a question. My husband is hoping to start as a self employed domestic cleaner soon and I'm hoping to start selling the broken costume jewellery I have been mending at craft fairs soon. Do we need to keep 2 separate account books or can we keep them in the same one?

Entirely up to you, but would be very difficult to manage performance of these two separate income streams if you don't have good records that details the individual profitability of them.

Lovelyjoolz

You each have to file a separate tax return, so why would you want to merge the accoutns together? It will make a relatively simple process very difficult for you.

Keep separate accounts.

heretolearn_2

Unless it is one single business you are running as a formal partnership, you need to keep separate accounts.

InsideInsurance

You dont need separate accounts as you are sole traders but it is normally sensible to have them separate as it makes life easier to deal with errors when you can simply refer to bank statements rather than having to try and recall if an O2 bill is for your or his mobile etc.

The other reason could be if you want to accept cheques in your business name as most sole trader accounts, from my experience, allow only one trading name to be added so either you'd both need to use the same trading name or not have the option of cheques payable to the trading name.

There may also be a practical point that you may not be able to have a "joint" business account without it being a partnership. Of cause some people breach the T&Cs of their accounts and just use their personal accounts rather than setting up business accounts.

Lovelyjoolz

InsideInsurance wrote: »

You dont need separate accounts as you are sole traders

The OP wasn't asking about bank accounts, they were asking if they should keep their accounts books separate, by which I understood them to mean their accounting records, reciepts, invoices etc etc

InsideInsurance

My bad

antrobus

Charityworker wrote: »

OK, I have a question. My husband is hoping to start as a self employed domestic cleaner soon and I'm hoping to start selling the broken costume jewellery I have been mending at craft fairs soon. Do we need to keep 2 separate account books or can we keep them in the same one?

I'd suggest you keep separate records of each business so that each of you can continue to report your respective profits to HMRC on your own self-assessment returns. You can make those records in the same account book if you want, so long as either you or your accountant can distinguish one from the other.

I'm assuming here that your intention is not to go into partnership with your husband?

Mistral001

You might have to form a formal partnership if you want to trade together. Alternatively one spouse becomes employer and the other employee. That might work. Accountancy and/or legal advice probably needed.