Can you run multiple sole trader businesses at once?

Plenty of people do not rely on a single line of work. You might have a main trade that pays the bills, but also run a side business, or pick up occasional income from something completely different. It is a practical way of working if you are self-employed and want to spread risk.

The point that often causes confusion is whether HMRC expects you to register each of these activities separately or if one self-employed registration is enough.

One UTR, one tax return

When you register as self-employed, HMRC issues you with a Unique Taxpayer Reference (UTR). Your UTR number stays with you. It identifies you as the person who files a Self Assessment return rather than being tied to a single trade.

You do not need to register each new venture again. Everything is brought together on your annual return. For a step-by-step overview, see our guide to the Self Assessment tax return, and HMRC’s official page on Self Assessment.

Simple example. You make £30,000 profit from design work and £10,000 from selling second-hand clothes on Etsy, but you do not have to submit two returns.

You include both sets of figures on the same self-employment pages, and HMRC calculates your bill from the combined profit of both of your businesses.

If you accidentally register twice, read our article on what to do if you have duplicate UTRs.

When trades are kept separate

If your businesses are very different, HMRC may treat them as separate trades. A plumber who also runs a coffee shop would not usually mix those in a single set of accounts.

In cases like this, you would complete more than one set of self-employment pages in your return and keep clear records for each activity.

There is a bit of judgement involved here, and it’s not an exact science.

HMRC explains how they decide when a new trade starts in the Business Income Manual at BIM80505. If you are unsure when your trade officially begins, read our guide on what counts as your business start date.

Keep your finances organised

• Bookkeeping – keep income and costs for each trade in their own ledger so you can see what is happening in each business.
• Bank accounts – not a legal requirement, but using different accounts makes life easier. See our guide to having multiple business bank accounts as a sole trader.
• Software – most accounting tools let you tag transactions by project or business line, so there is a clear distinction between your different businesses when it comes to tax time.
• Records – you have a responsibility to maintain accurate records. See HMRC’s guidance on keeping business records if you are self-employed.

Other things to watch

• Trading allowance – the £1,000 allowance is per person, not per business. Running several ventures does not give you multiple allowances. Read our trading allowance guide.
• Loss relief – if one trade makes a loss, you can usually offset it against profits from another trade, but only if your records clearly separate the figures.
• Insurance – Ensure that your business insurance covers all activities you undertake. Policies often list specific occupations as well as exclusions.
• Extra ‘paperwork’ – more business streams mean more invoices, receipts and paperwork. Make sure you set aside enough time to keep on top of your paperwork.

Should you use a limited company instead?

Keeping everything under one sole trader setup is usually fine as long as the businesses remain small and manageable.

If both are growing, or if you require a clear separation for legal or financial reasons, a limited company may be a better option.

Each company is a separate legal entity, so profits and liabilities do not overlap. As a sole trader, all income ultimately belongs to you and is taxed as your personal earnings.

Read our comparison guide to sole trader vs. limited company for more differences between each business type.

Getting advice

Running more than one business can make your accounting tasks more challenging to manage. If you are not sure how to split records between different trades or whether HMRC will expect you to report different business streams separately, an accountant can guide you. Hiring an accountant is often one of the wisest moves small business people make.