2 unrelated activities of Sole Trader

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Numbs

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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.
 
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.
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I have a similar dilemma - I'm trying to set up a company which is primarily an electronic design consultancy, but I need to use my taxi plate (which I've just bought god help me!) and my knowledge of second-hand car importing to get some cash-flow going for the first year or two.

From what I gather, it's called 'ultra vires' trading and it's not allowed. You must specify the company's business using a special EU-standardised code. I don't know how you can set up a ltd co. with several of these EU-standardised codes because there's only space for one such code on form A1 which is used when registering a company.

On the issue of a sole trader trading ultra vires, I don't know. Perhaps someone can enlighten us mere mortals
 
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:
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.
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But the paper-work is bad enough for just one company!!! Is there no way around all this paperwork?

Thanks,
 
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.
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Can you offset expenses from one company against profit from another in this scenario? I doubt it...
 
Thanks for the replies. I don't intend having any companies. I am a sole trader with 1 registered business name. I suppose if I defined my business as engaging in both activities it could work, but if I had to advertise the business as such, the new activity would undermine whatever professionalism I have in the main activity.
 
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.
 
Keep the company law stuff separate:
Provided the business activity is mentioned in the objects clause of the company, it won't be ultra vires. No need for separate business names or anything.


Don't know about the sole trader stuff I'm afraid. I suspect that it should be allowed though. It seems like a genuine economic activity generating income.
 
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.
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I take it I can't then transfer money between these companies easily? And I would need seperate bank accounts?
 
Cellopoint, what "companies" are you referring to? Have you incorporated more than one company for carrying out your respective businesses? You never mentioned having more than one company or am I missing something that you may have implied?
 
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:
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.
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Having different registed business names within one single company does not make it a holding company.

A holding company is one which owns a number of other subsidiary companies (which may or may not be in different lines of business).
 
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.
 
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.
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Hi, many thanks for your detailed reply.

I have been looking at doing all the filing myself, but I think it's not worth the hassle. Basically, all I need is a limited company with a VAT number set up whose business will be in the area of 'electronic design', 'taxi driving' and 'car importing'.

I'm not really looking at high turnover (at least intially) so I will be applying for an audit exemption too.

So I guess it's down to the accountant for me then? Has anyone on here (without an accounting/legal background) set up their own company by themselves? How helpful are the CRO in doing this? It would be great if you could share your experience.
 
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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I agree it probably makes sense with smaller businesses to just register names (if you want seperate names for each business line) but until such time as one of these businesses is spun off into its own company no entity that can be described as a holding company exists.

BTW it might not necessarily make sense for the original company to be the holding company I'd take tax and other advice on that if and when the time came that additional companies were needed.
 
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