Should I keep separate accounts?

[ferfer29]

Hi I am a sole trader but I have 2 businesses and am not sure whether I should keep separate accounts or if I can combine it all.

My first business is a mainly supplying and fitting vehicle vinyl graphics, and also some signage for other businesses. I then branched out and now have a website making and selling wall stickers (still vinyl). My vehicle graphics business and e-commerce website therefore have different trading names.

Both businesses use the same suppliers, materials, and machines and equipment, and are essentially the same sort of trade, so i am finding it hard to separate my expenses. I also use the same bank account for both.

I have previously been told I can just combine my books, however when it comes to the tax return will it expect me to name each business and supply separate returns? If so how can I get around this?

Any advice would be greatly appreciated.

 

[Mr D]

Sole trader?

 

[ferfer29]

yes sole trader

 

[Scalloway]

I have previously been told I can just combine my books, however when it comes to the tax return will it expect me to name each business and supply separate returns? If so how can I get around this?

Set up your bookkeeping system to show the income and expenditure separately for each business. If you are using a handwritten cashbook or spreadsheets you just need a few extra columns. If you are using accounting software then it should be possible to have separate departments.

 

[ferfer29]

Set up your bookkeeping system to show the income and expenditure separately for each business. If you are using a handwritten cashbook or spreadsheets you just need a few extra columns. If you are using accounting software then it should be possible to have separate departments.

ok thank you. What should I do though when most of my materials for each business are on the same invoice addressed to business 1? Can i just split the invoice and show half of it for business 2?

 

[Scalloway]

Split it as seems appropriate.

 

[Jaswinder Singh]

I would recommend splitting them. In the future your trading performance may need to be looked at externally (perhaps a lender, investor or acquirer). Having everything separate will prevent a lot of confusion.