Business partnerships - few questions

johanne

Hiya bit of a long winded post but please stick with me if you can as i really need some advice and you need to know my background to understand why im asking.

Right bit of background I am currently unemployed and claiming Jobseekers allowence while trying to find a job. BUT im honest with myself and i know that through unfortunate circumstances my employability propsects arent too great as I have been dismissed from 2 jobs in the last 6 months through illness + had approx 6 months off ill in the last 12 months Im also 20 years old with only experiance in retail and only educated to AS level (half an A level) So im finding it extremely hard to find a job that im A/ qualified for through qualifications/experiance and B/ that will take me on with my sickness record. Add to that the fact that im currently living alone at the moment so need to find a job that will pay £720 net pay every month just to cover my minimum basic outgoings!! So im pretty much hoping and praying for a miracle!

However... My boyfriend and I are moving in together in August when my current tenancy ends to cut costs for both of us (and cos we want to live together of course ).. so my basic outgoings will be approximately £460 a month.. which is easier to find even through a part-time job or 2.

Now he has just started his own business a few months ago and lately i have been really helping out as much as i can all unpaid and just as favours for him... things like designing flyers (and helping post them) designing and sorting business cards, pulling in favours like getting 1000 flyers photocopied for free etc, taking phone calls when hes been unavailable and booking in clients etc.. coming up with ideas that have then lead to jobs coming in by the bucketload etc. I done all this just to help him out.... but ive really really enjoyed it! Anyway he has now asked me.. if id like to consider joining the business and making it a partnership as ive helped so much and the business is really picking up since i started helping... meaning i can take a wage/salary from all the work im doing and also can get experiance officially to put on my CV:D

Now i really really want to do this... BUT obviously as the business is new there are times there is no work and there will be no money coming in.... he already works as a freelance driver on days there isnt work through an agency.. so he has that 2nd income... but i wouldnt wanna rely on that to make sure MY share of the bills etc are paid.. so id like to go into the partnership his business but also maybe work part time in a shop or something just to supplement my income for the "lean" times. (would be easier to find part time work too) What would be the tax implications of this??

I know from what ive read as a partnership wed have to both register self employed and pay class 2 and 4 NI contributions and aswell as both doing our own tax Self assessment returns wed have to submit a partnership one too. But how would the fact id be part of a PAYE system aswell affect it?? Would it all get hell-ishly complicated?? (then again what am i asking - its tax of course its complicated!!)

Also as we'd be working from home (as the spare room is his office at the moment) what can be claimed back in tax allowences etc? Im sure certain things can. And who would be able to claim them? both of us or just him? Im confused!

Nursey

Johanne, there is no reason why you cannot be a partner in the business as a self employed person and have a part time job where you would pay your tax and NI from your partime job earnings as normal.

I am a partner in a business and take monthly drawings (putting a poriton of this away for my tax bill) which is the equivalent of a salary as I work full time in the business. I am also employed by an agency and work the odd shift, paying tax and NI from the wage I get from the agency. I also do some other work for an insurance company and am self employed by them so when they pay me, I put approx 25% away into my tax account.

I have an accountant that completes my self assessment tax form once a year and calculates what my tax bill will be. I give to her all my wage slips from my agency work, details of what I have been paid by the insurance company and the partnership short relating to my own company. Alternatively, the inland revenue will help new business people complete their self assessment form. For me, my accountant is more than worth her weight in gold and does more than just filling in my self assessment form.