should i go self employed ?

martinsutton

Hi - been luking for years and finally decided to join:j
hopefully someone can help.
I work, my wife does not. We complete self assessments each year as we rent out 2 houses, they just cover costs.
we have decided to launch a small business from home, childrens party related.
I have looked into registering as a business and there seems to be no requirement to become a partnership, LLP, limited company etc. Is this true??

We are thinking therefore of registering my wife as self employed so we can claim back expenses and pay her a wage to use her allowance up a bit. If we are a partnership, would i also need to be self employed?

hope you can help
thanks in advance

fengirl_2

There is no requirement to trade under any legal structure, your wife can just register as self employed and trade as a sole trader. She would pay tax on her profits, not on her wages.
If you decide to trade as a partnership, then you would both register with HMRC as a partnership, but would pay tax on your individual shares of the profits.

martinsutton

fengirl wrote: »

There is no requirement to trade under any legal structure, your wife can just register as self employed and trade as a sole trader. She would pay tax on her profits, not on her wages.
If you decide to trade as a partnership, then you would both register with HMRC as a partnership, but would pay tax on your individual shares of the profits.

many thanks - presumably she could take all / any of the profits and as long as it is under her threshold, there would be no tax to pay?

orangeslimes

martinsutton wrote: »

many thanks - presumably she could take all / any of the profits and as long as it is under her threshold, there would be no tax to pay?

If it is HER business and she registers as a sole trader and it is not your business she could.

martinsutton

orangeslimes wrote: »

If it is HER business and she registers as a sole trader and it is not your business she could.

We both like the idea of it being a joint venture. I was thinking along the lines of me not having to register as self employed. i.e. I would be an unpaid partner in the partnership, my wife would do most of the work and i would not take any profit. This would mean i would not have to be self employed and pay NI.

Trying to avoid NI for me, I accept my wife has to pay it and that's not an issue. The biggest issue is that all of the costs so far have come from my account, so we think the partnership would be the best solution with Deb (my wife) taking all the profit.


thanks

moneypooh

this might help:

http://www.businesslink.gov.uk/bdotg/action/detail?type=RESOURCES&itemId=1073789609

I believe the partnership can have unequal shares, but usually it's divided between the partners equally, however other MSEs may clarify. IIRC when we started a partnership we were 50/50 even though I was working at the time.

fengirl_2

You can't have it both ways - if you are a partner, you need to register as self employed. You can split the profits any way yoou choose.

p00hsticks

martinsutton wrote: »

We both like the idea of it being a joint venture. I was thinking along the lines of me not having to register as self employed. i.e. I would be an unpaid partner in the partnership, my wife would do most of the work and i would not take any profit. This would mean i would not have to be self employed and pay NI.

So what would you actually be contributing to the partnership ?