Sole trader / partial partnership?

[Vasquez65]

Shortly going self employed as a gas/heating engineer, I used to work with someone also gas qualified and thinking of going it alone too, we live in different counties, he has a lot of contacts and has suggested we work together.
Most jobs, like boiler repairs and servicing will be done (and will be paid ) individually, New boilers are where we would work together, splitting the profit.
The sticking point is (potential) Vat registration if we go full official partnership with hmrc, as sole traders we each have an £85k limit but presumably as a partnership it’s £85k between us?

Could we have an official partnership (with partnership tax return) just for the joint work and then just be sole traders for the individual jobs? will each have own Van/tools etc.
Are there any other options if the above isn’t possible?

 

[StevensOnln1]

If you're working separately on most jobs, wouldn't it be easier to bring each other in as a subcontractor for the boiler installations? That way you each have your own separate business with your own VAT threshold and and invoice each other as and when two people are required.

 

[lesvatadvice]

You are correct on the issue of VAT registration. You should consider the potential loss of VAT input tax on costs if you don't register; e.g: vehicle, tools, as well as materials and overheads. You may find that the choice not to register for VAT makes only a modest difference to you.
If you register as a partnership, as above, you should also consider the Flat Rate Scheme, as that may provide savings.
Book an hour with an Accountant or bookkeeper to crunch some numbers.

 

[Andrew Graham]

Shortly going self employed as a gas/heating engineer, I used to work with someone also gas qualified and thinking of going it alone too, we live in different counties, he has a lot of contacts and has suggested we work together.
Most jobs, like boiler repairs and servicing will be done (and will be paid ) individually, New boilers are where we would work together, splitting the profit.
The sticking point is (potential) Vat registration if we go full official partnership with hmrc, as sole traders we each have an £85k limit but presumably as a partnership it’s £85k between us?

Could we have an official partnership (with partnership tax return) just for the joint work and then just be sole traders for the individual jobs? will each have own Van/tools etc.
Are there any other options if the above isn’t possible?

A separate set of books for the partnership is a lot of hassle when profit can be apportioned through the CIS scheme. It would give you an additional £85K headroom re VAT registration.
Beware of setting off as a sole trader then setting up the partnership - this could be argued as an artificial split re VAT threshold.