ending partnership to become a sole trader

appiannews

hi, advice needed

I have a small business partnership with my husband, I work full time at it but as my husband has a full time job elsewhere he doesnt have the involement that we original intended when the partnership was formed so to simplify things we have decided to change the business to a sole trader, me. So my question is how do we do this?

Thanks in advance for any advice.

fengirl_2

Do you have a formal partnership agreement? if so, you will need to look at this and find out what legal formalities you need to go through.
If not and it was an informal partnership, you need to agree the date the partnership was dissolved and close the partnership bank account. You need to have the final accounts made up to the date you finished and make sure the assets (and any liabilities) are transferred to you alone. You will register with HMRC as a sole trader and start a new set of books. Your first accounts will normally be made up to 12 mths from the date you started on your own.

martindow

fengirl wrote: »

Your first accounts will normally be made up to 12 mths from the date you started on your own.

It might be an idea to have a short first 'year' so that your accounts match the financial year to make tax returns simpler.