sole trader to partnership

benhall14

First off, this is a great forum.
I've been reading many of the posts, but cannot find any that apply to my situation..

Im self-employed since July 2009, earning over the personal allowance of £539.58 per month. I was wondering, if i brought in a partner - 50/50, whether the total profits get split into two, and then each partner gets taxed on anything over their 539.58 personal allowance.

for example, if my business earnt £1000 per month before tax, i would have to pay 20% tax on 460.42 which is 92.08. (excluding national insurance). but if i was in partnership would it be so, that each partner has £500 before tax, but we would be below our 539.58 personal limit, we wouldn't have to pay tax until we earnt more than the limit.

sorry if this sounds a little confusing, but im new to taxing - read some posts on here, that inspired me to ask..

any help would be apprechiated

RJT_ROMFORD

SORRY CAN,T ANSWER YOUR QUESTION BUT CAN YOU ANSWER MINE? I've just signed up to the forum ( my 1st ) and would like to ask a tax question, but do not know how to.

cottager

RJT_ROMFORD wrote: »

SORRY CAN,T ANSWER YOUR QUESTION BUT CAN YOU ANSWER MINE? I've just signed up to the forum ( my 1st ) and would like to ask a tax question, but do not know how to.

Go to the main page of this board here...
http://forums.moneysavingexpert.com/forumdisplay.html?f=22
and click on the blue 'New Thread' button on the left... there's one just above the list of posts or another at the bottom.

In the next screen, fill in the 'Title' field (to sum up your question and give us a clue what it's about), and then type your full question etc in the larger empty 'Message' field beneath.

If you want to you can then preview your post to check what it will look like (Preview Post button) and make changes; then when you're ready to post it click the 'Submit New Thread' button.
Voila!

There's help about this and other things here:
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Elaine_Wilson

Benhall, yes, you have it right.

Would this partner actually work in the business? If not, then you should be aware that HMRC are gunning for set ups like this. But so far they haven't come up with a workable solution.