Numbs said:I'm a sole trader whose main business is as a consultant. This is where my main business expenses occur as well....transport, office equipment etc..
I am taking a short term contract to do something that is entirely unrelated to my main activity. Can I use my business expenses from my main activity to lessen my taxable income gained from my short term contract. I doubt it, but would appreciate some confirmation from somebody in the know.
ivorystraws said:Why can't you have a registered company which has more than one registered business activity... for instance, for a company which has a number of online businesses none of which are related, each of the businesses will have it's own registered CRO number. The company should be orginally formed specifically for this purpose i.e. it's a holding company.
Can you offset expenses from one company against profit from another in this scenario? I doubt it...ivorystraws said:Why can't you have a registered company which has more than one registered business activity... for instance, for a company which has a number of online businesses none of which are related, each of the businesses will have it's own registered CRO number. The company should be orginally formed specifically for this purpose i.e. it's a holding company.
ivorystraws said:I never mentioned having any number of companies... that's crazy! One company with a number of registered businesses, that's my proposal. You can have as many registered business names as you like registered under a corporate entity.
ivorystraws said:Why can't you have a registered company which has more than one registered business activity... for instance, for a company which has a number of online businesses none of which are related, each of the businesses will have it's own registered CRO number. The company should be orginally formed specifically for this purpose i.e. it's a holding company.
dam099 said:As long as a company is permitted by its objects clause to do so I don't see any great problem with having seperate business lines within the one company nor is it strictly necessary to have seperate bank accounts.
Depending on the size of the company there may be obligations under accounting standards to break down major business segments in the accounts and even if its not required its a good idea to do so internally anyway so management know which business areas are performing well.
You will also need to identify turnover and purchases seperately for VAT & other tax purposes etc as different business areas may have different treatments but it is not as important that this be done through a seperate bank account as that the accounting records are kept in such a way as to be able to clearly seperate them in your accounts and returns (any good accounting package should allow for this and indeed its possible to do it in a properly set up manual system as well).
There will likely be expenses in any event that relate to both businesses e.g. company fees, accounting fees, premises etc. so allocate them on some sensible basis e.g % of turnover or % of premises used for each business etc.
ivorystraws said:Correct but in this situation where there are a number of different businesses registered, desn't it make sense to create them initially as just a registered business (to lower costs and admin) and at some favourable point, to spawn them off into a company of their own under the original legal corporate entity under which they were created i.e. the holding company.
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