Can I put revenues through different businesses through same Ltd co?

[washerwoman2]

Just that really. I've recently been made redundant and am in a sector which has lots of freelancing prospects. Am planning to set up a ltd co to be able to do contracts with large companies. However I also have two business ideas I want to follow up in addition to seeking a contract and possibly in the future I would run only these businesses.

1 - a travel related company and
2 - selling beauty products which I already make for my own personal use

I'm getting clear on the legislation and insurance requirements of both these businesses but am not sure if I need a separate company for each or if I can use the same Ltd co for all three revenue streams. Is it possible to be a sole trader for one business but channel the others through the ltd company? (no idea if that would make sense financially even if it were possible)

[emma123456]

Yes you can but I'm not sure it would be wise. What about VAT? will you become VAT registered? The turnover from 3 businesses could quickly breach the VAT thresholds. Would you have employees? I'd recommend talking to an accountant as there are lots of issues here.

[emmajones2013]

HMRC says www.gov.uk/guidance/vat-registration-for-groups-divisions-and-joint-ventures which borders on what you're talking about.

So yes, Emma is spot on. Provided there's no direct link (other than you) between the businesses they can each run as separate entities, you can run any trading names through the Ltd Co or as individual businesses without the Ltd Co and the combined income will be the same amount, so VAT liability would be the same too.

For sole traders VAT registration relates to the individual, not the business(es).

[taxguru]

As long as you choose a generic name for the limited company, you can have several different businesses operating through it. Could be useful as you can freely swap money between businesses as required and losses of one business can be set against profits of another if all under a single umbrella of a limited company. But, as said above, you'd reach the VAT registration threshold sooner.

If you have several businesses as a sole trader, they're still all added together for VAT reg purposes, but you can still set losses of one against another.

If the businesses are truly independent (no common customers, no common suppliers/products, etc)., then you could have some under a limited company and some under sole tradership to avoid vat, but then you don't have the same freedom to transfer money between them tax free and don't have the same opportunities for setting losses against profits.

I know it's "how long is a piece of string", but you really do need some kind of business plan for each business so that you can decide which direction to go in.

[Kanga59]

Losses from one business will only be offset against future profits on that same business. So I'd keep streamed accounts for MI if I were you.

[kjwh]

Losses from one business will only be offset against future profits on that same business. So I'd keep streamed accounts for MI if I were you.

Losses from one business CAN be set against profits from a different business in the same accounting period within the same limited company, so you can offset losses from a new business against profits made from an existing business if in the same period.

[32ndfloorandabitdizzy]

The insurance for the beauty company be be very high as will the lab testing costs etc. depending on what the travel business actually does (will it have to pay into abta etc) then insurance may also be high.