first time partnership - how does it work

[bell]

I've always been either a sole trader or had a ltd company and I'm considering embarking on a partnership. Could anyone let me know any major points about partnerships...do we each just do our own tax return as I did as a sole trader? Do we need to notify the inland rev (I'm already registered as self employed and do a self employed tax return each year...can I just add my earnings as a 'partner'). Very grateful for any advice§ Thanks in advance

 

[Joyous]

You’ll need to register the partnership with the Inland Revenue so that it can get its own UTR number. If your intended partner has not yet registered as self employed he’ll need to do so within 3 months of the partnership starting to trade. All this can be done via the CWF1 or via the self–employed registration helpline.

Each of you will need to fill out your own individual tax return and the nominated partner will need to complete a partnership tax return as well.

Regards

Joy

 

[Cornish Steve]

Don't make the partnership 50:50. Be sure to make it 51:49, 55:45, or something similar. That way, someone has the authority to make a legal decision when you can't agree.

 

[creacom]

And just to continue with what Steve said above - make sure you get a legal and well written partnership agreement drawn up and signed by both of you. No matter how well you might know your future partner or how great a friend he/she is, its essential.

Jacqui

 

[Cornish Steve]

And just to continue with what Steve said above - make sure you get a legal and well written partnership agreement drawn up and signed by both of you. No matter how well you might know your future partner or how great a friend he/she is, its essential.

Jacqui

Agreed. My business partner and I have worked together swimmingly for two years, and she was the one who insisted that I take a higher percentage of ownership. Right now, I doubt that I'll ever need to exercise my right to make a final decision, but you just never know.