Your Questions Answered: I've started a new business, do I need to register on the HMRC website again
Whilst Covid-19 is having a devastating impact on our beloved industry, we're finding new ways to make money. From Sainsbury's check-out to crop farming (my experience) and everything in between, including starting a new business. Charlotte got in touch.
I set up as self-employed at the end of last year (using your very helpful resources) as I started working freelance as a Theatre Facilitator & Designer. Since March, I have started up my own business selling on Etsy and I am beginning to sell at markets. Do I need to register this business separately to already having registered as self-employed for the Theatre work?
I can see why selling on Etsy, becoming a Yoga instructor, Sports Massage therapist, Personal trainer, Florist and many, many more would raise this question mark. New income, new business to register, right? Well actually, it's up to you. If it is helpful for you to keep the income streams separate as 2 different businesses, then go ahead and add a separate business into your tax return (you can probably wait to add this to your tax return, rather than registering a new business immediately).
Businesses adapt and grow all the time, so you don't need to register a new business every time the nature of your work flexes. Next time you do your tax return, it's important that your 'business description' relates to what work your business has actually been doing that tax year. Mine has ben updated numerous times!
So when you get to the business description bit in your tax return, just update the description to best suit the work your business has been doing. Something like "Theatre Facilitator, Designer and XYZ Etsy seller" (whatever it is your selling on Etsy). Or if you've just trained as a PT, you might have "Performer and Personal Trainer". Got it?
You'll see the section I'm referring to in our 'How To Tax Return' screenshot step-by-step guide here.
The other thing to be aware of, when starting a new income stream, is that you cannot include the training costs as an allowable business expense for your current business. For example, if you're a performer and want to become a Yoga teacher, you cannot expense the training costs of you qualifying.
That said, once you're set up and your business description is updated, you can then expense as normal for your business. To return to our previous example, if you're now a 'Performer and Yoga teacher' and your business description reflects that, then you can expense things like studio hire and yoga mats. More on allowable business expenses here.