Adding A Partner?

benhall14

Hello,

My business commenced in August 09, and since then the business has grown. I have someone who i want to make a partner in the buisiness, but im a little confused as to how to go about it. I have just submitted my 2009/10 Tax return as a sole trader. My idea was to get my partner to register as self employed, then on next years tax return choose partnership? but i feel this is incorrect.

Anyone done this before who can give me a few pointers as to what i need to do to register a partnership?

thanks

ceeforcat

This is complicated as, for the first couple of years, your new partners tax will be based on different accounting periods from your own.

For many of us involved in tax for many years, this is an area where planning is essential.

However, the best way to look at it is to assume that your partner, like you, is also self employed. His profits are derived from the partnership and taxed as if he was a sole trader in his own right. There is no such thing as the taxation of partnership profits.

Simplistic explanation I know, but it is a complex area.

benhall14

thanks for the reply.

My business partner has registed on the HMRC website as self employed and put my Name and National Insurance number as the partner, as we dont yet have a partnership UTR. Is there anything else that i need to do to register the partnership, or will my partnership tax returns automatically be sent next April?

thanks for the help