Multiple Trades Through Single Company

Multiple Trades Through Single Company

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I have a client who is putting a number of family "self-employment" incomes through a single company. Eg He is putting through IT consultancy income and his wife adoption assessment income as a trained psychiatrist. Assume that there are no IR35 issues when responding. What are the issues I should advise the client?

Many thanks.

Douglas
Douglas Quinton

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By AnonymousUser
06th Jul 2006 11:14

It's not quite clear ...
... what it is hoped will be achieved by this. What are the contractual arrangements for the wife's professional income? If the contract is with the wife personally then putting the income through a company achieves nothing. The income is still assessable on her and all she has done is lend money to the company. I see no reason in principle why the company may not contract to provide her services provided the adoption authority accept the arrangement.

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By AnonymousUser
05th Jul 2006 11:13

Separate Businesses - Tax Treatment
There is nothing wrong with an individual running multiple trades. However, he /she should really prepare separate trading accounts for each trading activity in order to establish the correct trading profits for each business.

This is particularly important if one of the trades is actually generating losses rather than profits. If that is the case, the taxpayer has to ensure that these losses are offset in accordance with correct the tax regulations. Merging two or more businesses will obscure whether all the businesses are genuinely profitable. Also, a business can only offset allowable expenditure regarding that particular business. Merging the accounting details of two or more businesses will obscure which expenses relate to which business.

Obviously, incorporating a wife's trading income into a husband's trading accounts is not really correct at all - as not only are they separate trades for tax purposes, they are also separate individuals.

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