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As a sole trader, you might well have more than one business. The good news is that it’s absolutely fine to do so – sole traders can have two (or even more!) businesses. A sole trader setup is the simplest business structure. It means that you run your business as an individual, and any profits after tax are yours to keep.
 

Do I need to register each sole trader business separately?

How does this affect my tax, VAT and National Insurance?

Tax and NI for sole traders with more than one business

VAT for sole traders with more than one business

Will I still qualify for the trading allowance?

Having more than one sole trader business doesn’t mean that you have to register for self-employment again. If you do that, HMRC will issue you with another UTR number, and expect you to complete separate tax returns for each business. Instead, you’ll submit one single Self Assessment tax return, with a separate section to deal with each business.

 

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There are tax, VAT and national insurance implications you should be aware of if you have more than one sole trader business. We’ve broken them down into sections below, to make it easier to understand.

When you complete your Self Assessment tax return, you’ll be required to complete a ‘self-employed income’ section for each business. The amount of tax and NI that you owe as a sole trader will be calculated on the total amount of profits that you make.

Unfortunately, you will only get the Personal Allowance once, rather than an allowance for each business. This means that the tax free Personal Allowance only applies to the total amount of everything combined.

Sole traders can have more than one business, but should remember that they’re not legally separate from each sole trader business they have. This means that you must consider all of your sole trader income from each business to make sure you register for VAT when you’re supposed to.

You must register for VAT when your turnover reaches the VAT registration threshold in any 12 month period. If you have more than one business, the total turnover from all of your business income is used to determine if the threshold has been reached.

As the VAT registration is applied to all of your businesses, it means all of your customers will need to pay VAT. This might not be desirable for all of your businesses.

The trading allowance is a tax-free amount for miscellaneous trading income up to £1,000. It is a form of tax relief for sole traders and those with side businesses. If your business income is less than £1,000 a year, you don’t have to register for Self Assessment or pay tax on this income.

Talk to one of the team about our online accounting services for your sole trader business. Call 020 3355 4047, use the live chat button on screen, or get an instant online quote.

About The Author

Elizabeth Hughes

A content writer specialising in business, finance, software, and beyond. I'm a wordsmith with a penchant for puns and making complex subjects accessible. Learn more about Elizabeth.

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Pegal Productions (Angela Knight)
Pegal Productions (Angela Knight)
13th March 2021 5:05 pm

I have a query. Can I consider my first self-employment as an umbrella for my other two? I first became an ordained minister; then I opened an online shop; then I decided to try to self-produce my own film (help appreciated!). HMRC saw all these as the same, with regards to my tax return; they said that as I was already registered as self-employed I didn’t need to register again. Can I consider my shop and my film production part of my ministry, or do I have to consider them separate from it? Thank you for your time.

Pegal Productions (Angela Knight)
Pegal Productions (Angela Knight)
18th March 2021 10:38 am

Thank you; that makes sense.

Normski23
Normski23
20th September 2021 11:22 pm

A further point to clarify.. Vat …If I have 1 business as a sole trader and 1 business as a Ltd company a different business… as far as vat is concerned are they treated seperately,and so If both stay under the vat limit. and say 60k each. will they be liable to pay and collect VAT . or if the combined total turn over of the 2 is more than 85K ..

Bobby Hook
Bobby Hook
23rd April 2021 5:24 pm

Hello. This is an interesting article. I have two businesses that are VAT exempt and I’m thinking of seting up a third completely different business that would charge VAT.

On there own they wouldn’t reach the VAT threshold however combined they would.

Would I just pay VAT on the business that is VAT applicable?

Thanks in advance
Bob

Jon
Jon
17th September 2021 5:36 pm

I’m currently a sole trader & VAT registered as am over the VAT Threshold. I want to start up a 2nd business, but as a 50/50 partnership. On its own this will be under the VAT Threshold. Will this 2nd business need to be VAT registered as the combined income for me from both will be over the Threshold, or will it be treated on its own merits as its a partnership & not me as a sole trader?

Ali
Ali
14th November 2021 1:43 pm

Hi, Is it possible for a single sole trading business to have more than one business name?

Jane Wolf
Jane Wolf
15th November 2021 10:41 am

Hi
I am a sole trader with two businesses. I want to close one and let HMRC know, but I can’t see how – only how to tell them that I’ve stopped being self-employed altogether, which isn’t right. Do you know how I do this, please?

Marie
Marie
28th November 2021 7:52 pm

I am a sole trader and was trading with one business up to last year. I now wish to start a new business still as a sole trader. Do I start my invoice numbers from 001, or do I continue the sequence from my last business?

Louise Waring
Louise Waring
2nd February 2022 9:07 am

Hi there, I’m a sole trader with two businesses and looking for an accounts software (MTD-friendly) that will allow me to record both businesses separately, like the tax return currently does. They all seem to want me to pay for two separate accounts, even though I’m a sole trader and not VAT registered. Any ideas?

Hana
Hana
16th April 2022 7:52 am

Hi, I was wondering, if I set up a second business as a sole trader, how soon do I need to notify HMRC? Say I started my second business 6th April 2021, can I just add it to my 2021/2022 tax return? Or do I need to notify them first? How soon after I start my second business do I need to notify them?
Kind regards,
Hana

Last edited 1 year ago by Hana
Pippa Broadhurst
Pippa Broadhurst
7th June 2022 5:06 pm

Hi – I’m a sole trader in the Film industry, paid as a sole trader because we go from one film to another, always with different companies paying us. In the last couple of years, because of streaming, jobs have got longer and longer, so that this tax year I will actually have been employed by one company for the whole 52 week and therefore my income will exceed the VAT threshold. If I therefore have to pay VAT on my income, would it be better for me to return to PAYE status in future? I don’t see what benefits… Read more »

Pippa Broadhurst
Pippa Broadhurst
9th June 2022 3:41 pm

Thank you! I haven’t charged VAT to my employer because the film industry doesn’t work like that – they pay you a weekly amount as self-employed and you don’t know when you start a contract, how long you’ll work for, so you don’t know if it’s going to go over £85k or not. I provide artistic talent (illustration, graphic design) which appears to be VATable. So if I now register for VAT, because I earned over £85k in the last tax year, what happens? Because I didn’t charge any because there was no mechanism for me to do so, and… Read more »

Jack Mahony
Jack Mahony
15th June 2022 10:51 pm

I am a sole trading Plumber, not Vat registered. I get very close to the vat threshold each year and worried I may need to register in the future. I had an idea just not sure it’s allowed, to set up a limited vat registered company which would sell supplies directly to the customer, under its own brand and have its own invoices etc. it would have a mark up of 20% on the cost. I would then work for the customer doing the job and produce a labour only invoice, it may include some small material and sundries cost… Read more »

Hayley
Hayley
22nd July 2022 5:51 pm

Hi. Im hoping you can help. I’m currently self employed but considering starting up a separate business with a partner as a limited company. Would I need to put the money i earn from the limited company on my self assessment or would it be taxed through the PAYE system? Also would i pay a higher rate of tax if making money from a second income

Scott Cummins
Scott Cummins
28th August 2022 9:09 pm

So if I already have a Ltd company but then decide to start a separate Sole trading Business as well, do i need to register as being a Sole trader with HMRC when i already have aUTR number and complete a self assessment tax form for my earnings from the Ltd company? Can’t i just add the Sole trader Profits to the Self assessment form under the Sole trader section?

McMann
McMann
11th October 2022 1:24 am

If I am a sole trader and I have 2 different sources of income (no Ltd company setup for either):

The 1st being income from a Furnished Home Let and the 2nd being tech consulting, and only if the incomes from each were put together would I hit the £85k VAT threshold, do I have to register for VAT?

kate
kate
2nd November 2022 2:08 pm

Hello, thanks for the informative post. Just still unclear on one thing. Hope you don’t mind a question. I work as a masseuse (sole trader), but also starting to make a small amount of income as an artist (large outgoings at the moment as I am setting up). I use a personal bank account as my masseuse job funds my art. Is it a legal requirement for me to use separate bank accounts for my masseuse business and my art business? My art business doesn’t make enough money to cover its outgoings so a separate bank account seems impossible for… Read more »

edmond
edmond
15th January 2023 9:04 pm

Hello, I also have a query. Maybe you can help. I am a sole trader and I am also VAT registered. I provide engineering services and I have a trading name. Example: John Mayer trading as JM Scaffold Design. Can I have another trading name providing same services but still keep the JM Scaffold Design? Example John Mayer trading as MJ Scaffold Design. If yes, I know at the end of day I need to combine the income from both trading names + vat number will remain the same but on my Invoices do I need to specify both trading… Read more »

Stewart stalker
Stewart stalker
7th February 2023 1:44 pm

Hey, I am currently in full time employment but also have a business which I am registered as a sole trader. It’s a raffle competition website which comes under ‘lottery’ and is exempt from vat threshold purposes.

Looking at starting another business on top that would have to be registered for vat.
How would I go about it?

charlotte mcgaun
charlotte mcgaun
9th February 2023 9:51 pm

Get post, it has helped me so much! So I have a sole trader business, and in August 2022 I started renting out my house. After reading your other page on ‘should i own my property through limited company or sole trader’, I have decided I need to put my house rent as a limited company (more benefits). My question is, can I register it now and say it started August 2022? and, I already fill out my self assessment for my sole trader business, and have my own UTR number, so for the limited company, is there a form… Read more »

Jes
Jes
9th March 2023 2:46 pm

Hi, I’ve got a question relating to this. I’m currently a sole trader doing remote contractor work providing 3D Art services to clients in the US. I’m also wanting to start up another business which entails 3D printing physical goods and shipping those to the UK, and likely the EU and the US as well. The last 12 months of contracting have been quite good for me and I’m close to having earned over 85K income. I was told that since I provide services from the UK to the US I would need to consider the VAT rules in the… Read more »

Chris Martin
Chris Martin
13th March 2023 11:48 am

Hi, Looking for a bit of clarity if possible. I run a retail business as a sole trader which I’m vat registered for. one of the stores buildings I own and looking to develop this building, this would then be a second business. The costs of developing the building include a lot of vat, can I use my current vat registration to claim the vat in the building costs back? Or would I need a separate vat certificuite as a separate business to do this? also would I then have to charge vat on the rental as id be vat… Read more »

Stephen Gaskell
Stephen Gaskell
29th June 2023 9:56 am

Hi Elizabeth, Congratulations on a great post, it’s been running for years!! I’ve had a look through the existing Q&As but can’t find my particular question, so I’m going to ask it, if that’s ok. I have two unrelated sole trader businesses. I would like to keep all the accounts separate and have separate CCards and Bank Accounts. I have done this. All good. However, I am VAT registered and I can’t figure out how to submit a single consolidated VAT return. I use Zoho Books and it can file returns digitally (as per the MTD requirements) but only per… Read more »

Saima
Saima
15th October 2023 12:45 am

Hi, I currently have a limited company, but would now like to open a separate business as a sole trader. How would I go about opening the new sole trader business as I already had to register for self assessment with the limited company?
Thanks

Chris Green
Chris Green
18th October 2023 6:33 pm

Hi, thanks for the very useful article. Please can I clarify something regarding having two separate names as a sole trader. My son wishes to set up as a sole trader but doing two separate jobs. One is contracting himself out doing agricultural work and the other buying and selling 4 x 4 vehicles. So he would invoice the contracting as John Smith trading as JS Agri Services and the other as John Smith trading as JS 4×4. Could he lump the income all together on his tax return or will he have to separate the income and show them… Read more »

Anne
Anne
25th December 2023 1:02 pm
Reply to  Chris Green

I think the query above is actually my answer … two separate income from self employment sections. Not sure how I get another one online but I’m sure I can find out. Thanks again…and Happy Christmas. 😀

Anne
Anne
25th December 2023 12:46 pm

Thanks for a very helpful article. I run two completely different businesses as of this year but I can only see space on the self-assessment form for one business. Should I just squeeze both into the one box?

Thank you!

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