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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?

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

There are tax, VAT and national insurance implications you should be aware of if you have more than one sole trader business. We know it can be confusing. Get an instant quote for our online accounting services if you need more help!

Tax and NI for sole traders with more than one business

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 income.

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.

VAT for sole traders with more than one business

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.

Will I still qualify for the trading allowance?

The trading allowance is a tax allowance 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 2 months 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 »

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