Self Employed - More than one business

Self Employed - More than one business

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How much do you attempt to squeeze several business into one for a Self Assessment?

If a person has several low t/o businesses on the go - would you register them separately or merge them into a bland XYZ Trading?

Eg. Would you add Cleaning + Bookkeeping + Tree Felling together into one.

Does anyone have experience of HMRC getting shirty?

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By JimFerd
12th Nov 2015 15:12

I think..

Assuming all the businesses were profitable, I doubt HMRC would mind too much, as long as adequate business records were kept of course.

One of the main problems I could see though, would be application of any loss relief - future profits of the same trade and all that.

Personally I would never lump trades altogether like that, as it's just as easy to prepare separate sets of accounts. If the individual businesses are very small as you suggest, you could just do "3 line" accounts anyway.

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paddle steamer
By DJKL
12th Nov 2015 15:14

Surely if an individual they each go on his/her self assessment return as different trades under the one UTR, you would have no need to "register" each but you would need to split the different trades within the one return. (Complete more than one self employed supplement)

You/the client are the only ones who can say whether all three are distinct trades, a lot will depend on operation. Obviously tree felling might go with cleaning if under the umbrella of property maintenance, especially if same staff/premises/equipment, and if the bookkeeping was say part of a service re rental property that covered managed maintenance/ collecting rents/services and recording same plus operating the other services on the properties there might be a case, but I suspect you really need to examine how linked in operation/activity/client base they really are to determine the answer.

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By DMGbus
12th Nov 2015 22:02

Decorating + Gardening - ONE trade

About 20 years ago I had the case of a Painter & Decorator diversify / change his business to Gardening.    HMRC challenged my assertion / presentation of it being a single trade.   As it happens had HMRC actualy succeeded in the challenge not only would a more complicated tax return be the case but acelerated tax liabilities as the FYE was 30 Sepyember (as opposed to 5 April).

It also can affect the liabilities if losses were to be incurred (eg. rules for carry back).

In the example above my winning arguement was that gardening was a natural diversfication of decorating - the same group of customers (local householders wanting property maintenance).

In the early 1980's an interesting assignment given to me was for a partnership who traded both as market traders and ran a wholesale warehouse - declaring all as one trade of market traders.  My job was the split several years single annual accounts into two trades per annum.   As the FYE was 30 June this had all the issues of opening years assessments under then then PYB. 

The above experiences have influenced me to tend to describe trades as widely as possible on pages SA103.

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