Tax On Shared Business (Self Employed)
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kaytow
Posts: 1 Newbie
in Cutting tax
I'm new here, sorry if this is in the incorrect area.
I started an online business with my mum over a year ago, it never made much for the first few months and I was working at the time, but as it was shared we registered it to my bank. So money withdrawals went to me, I'd then transfer half to her bank.
I left work in March 2016, over 2016 we made about £10k - this isn't the full amount withdrawn in to my account however as there was a good few hundred paid straight to our online store bill (Etsy).
Then within the new year we've made about £2k per month, however in early Feb we changed it so the money goes in to my mum's account and then half is transferred to me. This was for personal easier reasons, nothing to do with tax.
We haven't registered self employed yet, it only suddenly rapidly picked up in about October and is purely a case of not realising where the time went to "register next week" - will there be a problem that it's been slightly over a year before we registered?
My main question is, on the money that's been earned so far, would I be taxed on the full amount going in to my account or when we register self employed can I show half has been going to my mum and so only consider we've had half each?
I hope that made sense - thanks in advance.
I started an online business with my mum over a year ago, it never made much for the first few months and I was working at the time, but as it was shared we registered it to my bank. So money withdrawals went to me, I'd then transfer half to her bank.
I left work in March 2016, over 2016 we made about £10k - this isn't the full amount withdrawn in to my account however as there was a good few hundred paid straight to our online store bill (Etsy).
Then within the new year we've made about £2k per month, however in early Feb we changed it so the money goes in to my mum's account and then half is transferred to me. This was for personal easier reasons, nothing to do with tax.
We haven't registered self employed yet, it only suddenly rapidly picked up in about October and is purely a case of not realising where the time went to "register next week" - will there be a problem that it's been slightly over a year before we registered?
My main question is, on the money that's been earned so far, would I be taxed on the full amount going in to my account or when we register self employed can I show half has been going to my mum and so only consider we've had half each?
I hope that made sense - thanks in advance.
0
Comments
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Hello there
You would need to register as a partnership if you are jointly in business with your mother, which is effectively a self-employment registration for each of you. You would therefore need to submit a partnership tax return, and a self-assessment tax return for each partner to disclose the profits split in accordance with whatever you agree between yourself and your mother.
It sounds like you may have started trading pre 5 April 2016 which means that potentially you should have registered before 31 January 2017 and submitted a tax return for 2015/16 to declare any profit during the period up to 5 April 2016.
Hope this helps0
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