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Post Info TOPIC: Sole trader with two trades


Newbie

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Sole trader with two trades


Hi All,

I have a client (sole trader). They have two trades.... second trade new in YE 19.

The second trade made a loss due to start up costs.

My question is can the loss be offset against the profitable trade in given tax year. 

 

Thanks

Louise



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Master Book-keeper

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Hi
So hows about an intro before we start. We always ask newbies!

Usual stuff - what prof body do you belong to, do you work for yourself or in a practice/ firm, are you a bookkeeper or accountant, what qualifications, how long in role, where up to in your studies-what exams passed/with what body/in midst of doing, where based, what you did before this role? That sort of thing. Helps get to know you but also how best to pitch answers.


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 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position



Newbie

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Hi Joanne,

Yes good idea.... less speed more haste as the saying goes!

AAT qualified. Bookkeeper. At this moment in time I don't belong to any professional bodies.

I have always been involved with accounts from leaving school (love numbers). I have a PAYE employment but do the bookkeeping on a self employed basis also.

Thanks

Louise



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Master Book-keeper

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Hi Louise
Sorry - to clarify - when you say AAT qualified - to level 3 or 4?

Who is your MLR with?

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 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position



Master Book-keeper

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oops and forgot to ask - do AAT know you are acting as s/e without their practice licence - this of course assuming you are still a member (not an issue if you are not paying your subs!). 

MLR of course is required to save you from a big fine and prison

Just need to clear up those points before going any further.



-- Edited by Cheshire on Saturday 20th of July 2019 10:15:53 AM



-- Edited by Cheshire on Saturday 20th of July 2019 10:17:00 AM

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 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position



Newbie

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Hi

Level 3, I did start level 4 but for personal reasons didn't complete.

Not a member of AAT

AMLS is with HMRC and I also have insurance.

Thanks

Louise

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Master Book-keeper

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Welcome to the madhouse Louise!

You will realise Im a pain, cant be helped, answer Qs with Qs, but then its because often there isnt enough info or one has to delve deeper!  Plus I do tutoring occasionally so I like to get folk to think wider!

What are the trades?

When exactly did the 2nd trade start?

What are the year ends for each of the businesses?

(Should they be looking at incorporating one/other or both? What happens if one goes belly up?)

Does your PII allow you to cover work that you are not experienced in? (Only ask, as it might be worth upping your cover or declining the work to save a claim)

Have you done any digging round ITA?



-- Edited by Cheshire on Saturday 20th of July 2019 10:27:47 AM

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 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position



Newbie

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Hi,

Ha Ha! Questions are always good!

Dog walking and Kids party entertaining. Kids party business started in YE 2019.

Client is a sole trader so YE standard at 5th April.

Kids party business will be profitable as not much outlay (apart from set up costs which are in the tax year i'm dealing with).

I am doing the preparation for the accountant so just wanted to make sure I was giving the figures correct by combining the two figures separately but overall profit taking into account the loss. Also for my own knowledge.

Thanks for your time.

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Master Book-keeper

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There is no such thing as a standard 5 April year end for a sole trader Im afraid. That of course is the tax year end, but it might not be the optimal date for the business year end.

Clearly in this case the client having an Accountant on board, he/she should have the discussion now about when the optimal time for the new business before tax returns are submitted and bearing in mind the tax year end has only recently occured. Tax planning is key.

You can of course submit the bookkeeping numbers to the Accountant to aid them with their discussions should they need it, but keep the numbers for each business completely separate.



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 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position



Senior Member

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Is dog walking really a 'business'?



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Caron



Master Book-keeper

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Casu wrote:

Is dog walking really a 'business'?


 It can be Caron.  A few round this neck of the woods run dog it as a business.  When I did pizza delivery I used to deliver to someone who had a sign written van.(just checked, they have a website too) and I've seen similar vans on my travels.



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John 

 

 

 Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.



Expert

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Indeed - why wouldn't it be?

A dog walker is providing something, in this case a service, in return for a fee. That's the very basis of what a business is.

I suspect what you're really asking - or, in fact, expressing surprise at - is that it's possible to make a living doing it, but clearly it is. And just as John has seen a sign-written van for such a business, I've seen the odd reference locally to a dog walking business. It's always stuck in mind because ever since the first time I saw such a reference I've felt a little envious, TBH. I'd rather do something like that than sit at a desk. Except when it's pissing down with rain, of course. :)

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Master Book-keeper

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More to the point, why would a dog walker need a bookkeeper as well as an Accountant? Although perhaps has lots of other dog walkers working for him/her and cannot possibly cope with the mountains of paperwork thus generated.

Surely a case for the usual plastic bag full of rubbish!

Watch out for undeclared cash!!

Dog walking vans........

Dog walking businesses are pretty typical of the state of this nation. Buy a dog, pay someone to walk it because folk are too lazy, or too busy trying to make a living to pay for their dog walker. (Include, baby making, making food, cleaning the house/car/bins, doing the garden......). So the world keeps turning.

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 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position



Forum Moderator & Expert

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Cheshire wrote:

Dog walking businesses are pretty typical of the state of this nation. Buy a dog, pay someone to walk it because folk are too lazy, or too busy trying to make a living to pay for their dog walker. (Include, baby making, making food, cleaning the house/car/bins, doing the garden......). So the world keeps turning.


 Hang on a second... Are you suggesting that people are too lazy for baby making so sub contract that as well... I'm in the wrong friggin trade!!!



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Shaun

Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.



Forum Moderator & Expert

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Cheshire wrote:

More to the point, why would a dog walker need a bookkeeper as well as an Accountant?


Well, They're obviously a Plc. in waiting! (same with the kiddies entertainer).

getting a listing on the nazdac is a real dog eat dog business and it's certainly no childs play.... Ok, I'll get me coat!



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Shaun

Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.



Master Book-keeper

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Shamus wrote:
Hang on a second... Are you suggesting that people are too lazy for baby making so sub contract that as well... I'm in the wrong friggin trade!!!


 Always a profession I fancied tbh Shaun.  Unfortunately not looking like Richard Gere or Tom Hardy has rather scuppered my chances, methinks  biggrin



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John 

 

 

 Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.



Guru

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Louise84 wrote:

Hi All,

I have a client (sole trader). They have two trades.... second trade new in YE 19.

The second trade made a loss due to start up costs.

My question is can the loss be offset against the profitable trade in given tax year. 

 

Thanks

Louise


 I thought I would answer the question

 

Yes.



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Frauke
BKN Book-keeper of the year 2011

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