Sole trader second business in the same field but then changing to ltd.
A sole trader that contracts their services out wants to set up a second sole trading business in the same field.
The second business will have its own premises and work carried out there will be independent of the first business but in a similar field.
My understanding is that the expenses of setting up the second business premises and purchasing equipment are to reduce the overall taxable profits from the first business.
However if the second business was then switched from being a sole trader business to a Ltd company after all the expenses have been absorbed by the first sole trading buissines and tax have been paid.
Would an adjustment have to be made to the reduced tax already paid from the sole trading business? Or can the new business start off without any debt and the sole trading business have benefited from the reduced tax liability?
Any help will be appreciated.