Can a Sole Trader Have Multiple Businesses? | The Accountancy Partnership (2024)

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?

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.

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’ve broken them down into sections below, to make it easier to understand.

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 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.

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-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.

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