Advice needed: Multiple business as sole trader

[dmorgan7615]

Evening all!

Im new to farming forum so bear with me! Im not sure this is the right section to be posting this.

I trade as an electrician and my bank account and business is under the same name. I have recently in the last few years started small scale contracting (self propelled forage harvesting) I have spoken to the accountant and he said i can run the two under the same thing as long as i keep it seperate i.e jo blogs harvesting.

I was just wondering if anyone else has come across this and what they did?
Also i was wondering about what sort of cover i need for forage harvesting? im guessing i need some sort of public liabity? but unsure on that one! And also open to advice to someone starting up at contracting. I wanted to have all the accounts and everything right from the start if that makes sence.

Many thanks, look forward to your replys
Dan

 

[Derrick Hughes]

i would look into starting a LTD Company for the contracting

 

[betweenthelines]

Have a look on the "Dairy" page-there's a guy on Anglessy wants monthly silage cuts on his dairy farm-get the contract for that and you can forget about the leccy trade!

 

[rose pilchett]

What FT said all you need is one big PLI type claim or a large unpaid creditor on one side of business and you risk both business going under

 

[Exfarmer]

You should have public liability for your leccy work. Definitely speak to your insurer about this as it is totally different realm. There is no reason to set up a seperate business, are you registered for VAT?
If you go over turnover limits you will need registration but I would have thought it would pay anway as farming customers will also be registered, technically the VAT man should be informed of this major change of business. However I do not think there is any absolute requirement, but purchasing a forager will most likely trigger an inspection.
Interesting change of business!

 

[dmorgan7615]

Hi thankyou for the replies! some useful advice! I have all the public liability& professional indemnity for leccy work. and also VAT registered.(mostly farm customers). I only plan on keeping things small scale, as i have about 2/3 forager customers. It does seem like a good idea about going ltd, yet when i spoke to the accountant he didnt think it was a good idea.

 

[Pasty]

Ltd will bring extra admin and accountant bills etc. Really the main reason would be if you wanted to be VAT reged in one and not the other. Or if you wanted to put losses or profits away from your sole trader status. Or maybe a liability thing. I would work out the costs of having a Ltd first and also the time factor for your accounting. I do have a Ltd as well as being a sole trader and it works well for me but you have to have a good reason for going down that route.

 

[yellow belly]

keep the administration simple from the statutary accounting point of view this keeps the accountants and book keeping costs down
one vat and simple accounts
then arrange the management accounting to give the information you need to manage the business if you have a only a hand full of sillage customers then you should not need a complicated accounts system that racks up costs

 

[dmorgan7615]

Perfect thankyou thats what i like to hear simpler the better! would you suggest opening another bank account for the few customers hardly seems worth it personally. Thats a good point keeping the accounts seperate thankyou.

 

[Pasty]

You don't need another account and it will cost in the long run. If you run something like Xero you can put income / costs into separate categories so you get one p/l figure for tax but you can also drill into the data and see what's working best for you. For example, I can tell you exactly how much I spent on chick crumb and growers pellets last year and comparing that with how many birds I ended up with is really useful. Likewise I can pull out all my sheep costs and will be able to stack that against income from lambs which are popping now.