self employed 2 trading names - confused

Busybee5186

Hello,

I am self employed, I trade under two business names A and B, although both businesses are similar, use the same raw materials, process, etc. This is because I do printed stationery, canvas and clothes and use a different trading name A to target the wedding market and B for everyone else, the difference being the designs mainly.

So when I buy stock I buy in bulk and none is allocated until I get an order then the order is made. I do not have the space or money available to keep the two stock seperate, or to buy two lots of equipment as this will be just pointless. Most of my expenses cannot be allocated to either A, B as they use the same things, I just print different designs on.

I am not tax registered as I do not earn enough. I am a mum who is slowly building my business around my young kids with the aim to to be working full time once they are at school and this being my main income.

So up till now I have completed my self assessment tax return as a sole trader based on my total income from both businesses. I now have to apply for housing benefits to help supplement my income. And the council has asked for a self employed form to be filled for each business, with details such as sales, stock, expenses, etc. I only keep the income seperate, not stock and expenses, so I am at a lost as how to seperate everything. I work an average of 30hrs a week, that is on whatever order I have, I tend to do all my designing for all outstanding orders and then set to production. It is way too much work almost impossible to keep track of how many hours I work on a wedding order or normal order a week as sometimes I can go weeks without a wedding order.

So my question is, do was I right by completing my self assessment tax return with total income from A and B.

And how do I separate the two and keep seperate books, bearing in mind if I buy 20 blank tshirts, 10 for wedding and 10 for normal and I get 15 wedding orders how do keep the paperwork straight?!

Thank you in advance for any help, at this moment it seems if I have to keep both businesses seperate, specially stock it is just not worth it to me.

phill99

You are completely over complicating matters.

To your customers you have different trading names. You could have 100 trading names, it doesn't matter.

But for purposes of book keeping and accounting, there is only 1 business. And thats you. Simply because you are are a sole trader. With a sole trader there is no legal difference between you and the business. So the exoenditure you have and the and the income generated needs only to be shown once, because there is only 1 of you.

Don't worry about trying to account separately fir 2 different trading names. HMRC wont be intetested. They just want to know what your total level of income, expenditure and profit. This would apply if you ran 2 completely unrelated businesses such as brick laying and cake decorating, you would simply have to account for the number of bricks you have bought and how many pounds of icing sugar you have bought.

Get it out of your head that you are 2 different businesses. You're not. You only have 2 separate businesses for the purposes of marketing and marketing only.

Busybee5186

Thank you Phill,

I very much appreciate your input and it totally makes sense. What do you suggest I do with the housing benefit self employed form, what do I give as the business name, A, B or my own name?
The person I spoke to insisted that I must complete a form for each with full accounts, although I explained everything and how I work.

phill99

But you will only have one set of accounts. Put your name and a T/A name. If you give them 2 TA names they will want 2 sets of accounts as they are notoriously stupid.

rach_k

When you complete your tax return, what name do you give as your business name? Give the housing benefit people the same name and nothing else. You can call the different parts of your business whatever you like but they're still only one business.

InsideInsurance

Legally there is only you, you have two trading styles. On all your official paperwork (invoices, receipts, website if transactional etc) you should be declaring Your Name t/a A or Your Name t/a B. In all cases the people are actually contracting with you personally as you are a sole trader.

For your own sake you can arbitrarily divide things up between the two trading styles but for almost anything official the two just get added back up together to give the overall picture for the legal entity (you)

Unfortunately not everyone in the benefits office is the smartest of cookies. You only need to complete the form once as there is only one legal entity, you can mention that you have multiple trading styles (dont call them businesses) but they run off of common stock, accounts etc