Sole traders to partnership

[dougie212]

Hi there

My wife and I are currently both registered as sole traders. I run a home improvement business, she runs an interior design and furniture refurbishment business.

We want to tie the business up as one and so I assume we would need to change to both being a partnership.

What would the process be for this? I don't currently have an accountant, we do our accounting ourselves. Is this combining something we could do ourselves or do we need an expert to sort this?

Thanks

Duncan

 

[Bob]

Are both businesses VAT registered?
If they are not, will combining the businesses mean that you exceed the registration threshold of £82,000?
Would that be detrimental to your business?

 

[dougie212]

Hi Bob

Thanks for your reply. No we aren't VAT registered and I doubt we would reach the threshold for a while to be honest.

 

[Scalloway]

You would be well advised to get a lawyer to draw up a partnership agreement in case of any disputes down the line.

 

[dougie212]

That's a good idea.. Although we are married and best of friends, you do never know so I think a partnership agreement would be good. Do I just tell HMRC we are no longer sole traders, cancel that with them and re-register as a partnership?

 

[Scalloway]

You need to remain registered with HMRC as individuals. When you complete your 2015/16 tax return you will do a self employment page for the period you were self employed. There is a box to note when the self employment ceased.

One partner will need to register the partnership with HMRC. More information here
https://www.gov.uk/set-up-business-partnership/setting-up