Separate sole-trader businesses normally need their own MTD records and updates. First establish whether the activities really are separate trades. Keep each trade’s income identifiable and allocate shared costs once; two bank accounts alone do not settle the question.
Identify the separate activities
Describe what each business does, any trading names and when it started. A trading name alone does not settle whether there are separate businesses for tax purposes. Your accountant should assess the facts rather than relying on how accounts are labelled.
MTD software needs to support the relevant business income sources. When records are mixed, it becomes harder to identify which activity a receipt or payment belongs to.
Build a practical separation
Use a clear tag or reference for each transaction. Keep separate sales summaries and note how shared costs were allocated. If both businesses use the same phone, premises or vehicle, record enough information for a reasonable review rather than charging the full cost twice.
Tell the accountant if a transfer between accounts is simply money moving within your finances. It should not be mistaken for another customer payment.
Check the quote before buying
Ask whether the plan covers both activities and any work needed to separate existing records. A package suitable for one straightforward trade should not be assumed to cover an unlimited number of businesses.
Example: design work and a separate trade
Explain the customers, services and working arrangements of both activities. Your accountant can consider whether the records describe separate trades and how they should be reported. Two bank accounts do not automatically create two trades, just as one bank account does not automatically combine them.
What about rental income as well?
Tell the accountant about it at the outset. Property and self-employment can affect the eligibility calculation and create separate reporting needs. A complete list is more useful than adding another income source shortly before filing.
Can shared costs be included in both businesses?
The same cost should not be claimed twice. Keep the total invoice and explain the use across activities. Ask the accountant to review a reasonable allocation, including any private use, rather than putting the full bill into each set of records.
Next step: Send a short description of each activity and a sample of how you keep records so TaxSimba can confirm the service scope.
Separate updates, one personal tax position
Where the activities are separate self-employment businesses, keep each income source identifiable for its MTD update. Do not combine them merely because they share a bank account. The annual personal return is the point at which relevant income and reliefs are brought together. Agree which sources the package includes.
Allocate one shared bill only once
Illustrative preparation example.
Two trades share a phone. Keep an explained allocation between them and any private use. Do not put the entire bill into both sets of records. Check first whether the activities are separate trades rather than inferring that from separate bank accounts.
Check: Can each trade’s figures reconcile without duplicating the shared expense?
| Check | Practical action |
|---|---|
| Are these distinct businesses for tax purposes? | Describe the activities, customers and start dates for a factual assessment. |
| Can every transaction be allocated? | Use clear business tags and a documented method for shared costs. |
| Does the agreed service cover both? | Confirm records, updates and annual-return scope for each activity. |
Do two trading names automatically mean two businesses?
No. The underlying activities and facts matter. Provide descriptions rather than relying on labels alone.
Can a single bank account be used?
It may be possible, but mixed records need reliable separation. One account does not remove the need to report distinct businesses correctly.
Download a checklist for this guide
- Describe each activity and start date.
- Identify sales and expense record sources.
- Tag transactions by business.
- Document shared and private-use allocations.
- Confirm software support and service scope for every business.