Starting multiple businesses.

Beartricks

Hi.

I'm planning on turning my tool making hobby in to a business later in the year. It will be mainly online selling direct to makers with some in person selling at trade shows etc once I'm established.

In the meantime I've also started selling print on demand t-shirts to a separate group of hobbyists. I don't think this will make me a ton of money but I'm expecting an influx of orders initially then it will most likely just be beer money going forward.

Both brands would be separate and I'd prefer not to sell everything via the same name or using the same online accounts etc for the sake of optics. I can see issues if customers are wondering why the handmade tool guy is selling apparel geared towards this completely different thing.

Can I sell under different names while completing one tax return if I am set up as a sole trader or are there benefits to setting up a company and trading under different names? Like I said I'm not expecting huge profits as I also have a day job but it's going to top up the coffers. As you can probably tell, this us my first time dipping my toes in to this so I'd appreciate any advice on how to best position myself in terms of tax etc.

Marcon

Lots of useful info: https://www.gov.uk/browse/business

Well worth a chat with an accountant before you go too far with anything, to make sure things are set up correctly and in the most beneficial way possible. You could trip up on the VAT issue if one (or both!) of your businesses take off in a big way.

Best of luck.

AskAsk

i believe you can set up as a sole trader, selling under different brands/labels/marketing names, whatever you want to call it.  this will keep the tax return simple.  you could start off like this then re-consider your options when you have more trading data on the profitable lines.

at this stage, i don't think it is worth setting up a limited company but that may be a consideration later on if the business takes off.

limited companies are often set up for liability segregation from the owner as well as tax efficiciency when the income becomes more significant.

Sandtree

A company or sole trader can have as many different trading styles as they want however official documents (invoices, websites etc) must somewhere identify the actual legal entity thats behind it... normally you have your trading style big at the top of the page and in small text at the bottom "Bob Smith t/a BearTricks Tools".

Tax returns are done at legal entity level but certainly the self assessment ones if you are a sole trader allow you to split the numbers between the brands or simply submit combined numbers... it makes no difference at all.  My accountant does our company returns so cannot say if it gives the same option or not as don't recall but there again would be no benefit in doing so (you only get single tax figures out etc).

This does mean that if someone does some googling then they can find your different trading styles. The other option is to have two companies, one for each, but then your costs increase with accountants, and filing etc. Plus if someone were to go to Companies House website they'd see you were the director/shareholder of one and they can then search for you and see you're the same for both companies. A little more work than a straight google but not more than 2 minutes for anyone who's used the website before.