Yes, a sole trader can run multiple businesses at the same time. About 3.1 million sole traders do it in the UK, but 20% of sole traders fail within their first year, and 60% don’t make it past five years, according to the Institute for Fiscal Studies, whose findings were based on HMRC tax records reported by BBC News. While it’s completely legal, running multiple businesses as a sole trader comes with responsibilities. For success, you’ll need to know how taxes work, what (and if) you need to register, how to stay on top of admin, accurate record keeping and whether there comes a point where a different business structure (like a limited company) might make more sense. Let CruseBurke expert accountants simplify the process and help you make the best decision for your business. What Is a Sole Trader? A sole trader is a self-employed person and runs one or more businesses on their own. There’s no legal difference between the person and the business. You keep the profits, but you are also personally responsible for debts and obligations. If something goes wrong, your personal assets may be at risk. As a sole trader, you’ll need to register with HM Revenue & Customs (HMRC) for Self Assessment (HMRC’s system for collecting Income Tax from self-employed individuals) once your self-employed income goes over £1,000 in a tax year. Is It Legal to have more than one Business as a Sole Trader? Yes, it is legal. You can run more than one business at a time as a sole trader. HMRC recognises that many people do this. The businesses may be different kinds (say baking cakes in one, doing graphic design in another), or related. You don’t need separate legal entities for each. But there are implications, especially around tax, VAT, and paperwork. Do You Need to Register Each Business Separately? No, you don’t have to register each business separately with HMRC if you are already a sole trader. You’ll have one Unique Tax Reference (UTR). All your businesses are under that UTR. You report them separately in the same Self Assessment tax return, each business having its own “trade” section. How to Register a Second Business as a Sole Trader You don’t really “register” a second sole trader business as such. If you are already working as a sole trader, you inform HMRC of what you’re doing when you submit your Self Assessment. If the new trade is very different, you keep records separately. You may need to update your business name or trading style, but you will still use the same UTR. How Tax and NI Work for Multiple  Sole Trader Businesses? Suppose you run more than one business as a sole trader. In that case, all profits from all businesses are added together for Income Tax and National Insurance. You fill in one Self Assessment tax return and declare each business’s income & expenses separately, but the total taxable profit determines your tax band. You don’t pay separately for each business. You may also pay National Insurance Contributions (NICs). Since April 2024, Class 2 NICs are no longer compulsory, but you can choose to pay them voluntarily to protect your entitlement to certain benefits like the State Pension. Class 4 is based on profit levels. Rates change over time. How Much Tax Do You Pay Running Your Own Business? For 2024/25: First £12,570 of profit is tax‑free (Personal Allowance). You only get one Personal Allowance. That’s the income you can make without paying Income Tax. Profits above that are taxed. Any profits between £12,571 and £50,270 are taxed at the 20% basic rate. Between £50,271 and £125,140 taxed at 40%. Above £125,140 taxed at 45%. Class 2 NICs are no longer compulsory from the 2024/25 tax year. If your profits are above the Small Profits Threshold (£6,725), you will automatically receive a qualifying year for State Pension purposes. If your profits are below this threshold, you can choose to pay Class 2 NICs voluntarily to build entitlement to the State Pension and certain other benefits. Class 4 NICs based on your profit levels. For the tax year 25/26, — 6% on profits between £12,570 and £50,270, and 2% on profits over £50,270. How Does Tax Work If You are Employed and Self‑Employed? If you have both employment income (PAYE) and self‑employed income, both are added together to calculate your total income. You get the same Personal Allowance to use across your total income. You pay tax on your combined income (profit). HMRC will deduct some of your income via PAYE for your employment. Then your self-employed profits are added and taxed via Self Assessment. NICs are separate: employee NICs for your PAYE job; self‑employed contributions (Class 2(voluntary) and 4) on profits. VAT for Sole Traders with Multiple Businesses VAT rules mean you must look at the total turnover of all your businesses combined (for VAT purposes). If that total goes over the VAT registration threshold, you must register. As of April 2024, that threshold was raised from £85,000 to £90,000. Even if one business is small and another is large, they together can push you over the limit. If that happens, you must register, charge VAT, and file VAT returns. Can I have Two Businesses to Avoid VAT? No, you cannot legally run two businesses as a sole trader to avoid VAT registration if their combined taxable turnover exceeds the VAT threshold, which is £90,000 (as of 2024/25 in the UK). HMRC treats all your sole trader income as one when it comes to VAT. So if you operate two different sole trader businesses under your name, their sales must be added together. Suppose the total turnover for VAT‑eligible goods or services goes over the threshold in any rolling 12‑month period. In that case, you must register for VAT, even if no single business crosses it on its own. What if I Split the Businesses Under Different Names? Trying to artificially split one business into two or …

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