Using money from one business to start another

taketothetrees

Hi all

I'm a very small sole trader currently working part-time around my wife's full-time shift pattern. For my current business I have a business current account where incoming money and outgoing costs take place, and a saving's account. I have an idea for a separate business project I'd like to start, but don't have the funds privately to buy what I need. Can I use what is in my business savings to buy the tools and equipment (only a few hundred pounds) for my new venture?

Sorry if this all sounds complicated, and thanks for any help given.

Matthew

Pennywise

As a sole trader, the money in the "business" bank account is regarded as yours. You pay tax on profit not on your withdrawals. Money taken from your existing business to start a second is simply drawings out of the first business and has no tax effect.

pramsay13

taketothetrees wrote: »

I'm a very small sole trader

Your size is irrelevant.
As pennywise says as you are a sole trader the money is yours even if it's in a business bank account.
Just make sure you keep proper records and all paperwork / receipts.

taketothetrees

Thank you. I thought as much, but didn't know if I can simply withdraw the money I need, or whether I need to include it in next year's tax return as a drawing?