Should I keep separate accounts?

ferfer29

Hi I am a sole trader but I have 2 businesses and am not sure whether I should keep separate accounts or if I can combine it all.

My first business is a mainly supplying and fitting vehicle vinyl graphics, and also some signage for other businesses. I then branched out and now have a website making and selling wall stickers (still vinyl). My vehicle graphics business and e-commerce website therefore have different trading names.

Both businesses use the same suppliers, materials, and machines and equipment, and are essentially the same sort of trade, so i am finding it hard to separate my expenses. I also use the same bank account for both.

I have previously been told I can just combine my books, however when it comes to the tax return will it expect me to name each business and supply separate returns?

Any advice would be greatly appreciated.

Pennywise

No, there's no need to separate the accounts for your personal tax return. You "may" wish to be able to split them for if and when you decide to sell one or other of the businesses, but there's no need for the tax return purposes.

ferfer29

ok thank you. Does the tax return not ask for each business separate though? not sure how i can split my expenses if this is the case when all my supplies and materials are the same.

agrinnall

I don't know how much more complicated it would make things but perhaps you should consider having a company that owns both existing businesses, makes all the purchases then sells them on to the lower level.

unholyangel

ferfer29 wrote: »

ok thank you. Does the tax return not ask for each business separate though? not sure how i can split my expenses if this is the case when all my supplies and materials are the same.

If you are a sole trader then you are the business. The trading names are just that - when you trade you are trading as you. Any contract/purchase is made by you.

sheramber

You do not enter the business name on the tax return, only the type of business,

Puflet

I'm a self-employed artist registered as a sole trader, but I largely operate two different types of business - one which involves caricaturing at events, and the other producing artwork in the studio. Like you, I use the same materials and equipment for both, and the same invoicing system for both. I have separate websites for caricaturing and general artwork, as they are aimed at different markets, and therefore different publicity materials etc etc.

I've never had a problem combining the two, and no problems submitting to HMRC as myself. If I also started an e-commerce website selling, say, mugs with my illustrations on, I would just count the income as part of what I make overall as an artist. Likewise if I sell work at a gallery, or get paid for leading a workshop.

I take it that neither of your businesses is registered as a limited company - which is when it would get complicated! - and if so, don't give it a second thought.