Self-employment registration: sole trader or partnership with spouse?

teddy1000

My husband and I have started a small business last year.
He registered as self-employed (sole trader) in April 2010.
I was on maternity leave until the end of 2010.

I've been working from home up to now, doing market research, website creation, marketing, etc for the business. We haven't made any money yet, but we're starting now.
At the same time I'm pursuing a second project, which might potentially turn into a separate business. I don't know how long it would take to be profitable. It also depends how the 'first' business goes.

Since my maternity leave ended, I need to register as self-employed now. My question is if I need to register as a business partner with my husband or if I should register as a sole trader? Does it matter at all for what business I work if I'm self-employed?

I hope this makes sense. I couldn't find an answer yet anywhere. Thanks so much to anyone who can give some advice.

Hammyman

You need to register as S/E AS SOON AS YOU START TRADING, not just when the business starts to make any money. So technically you're breaking the law if it was a partnership from the start.

If you're both working on business A then unless you're an employee of business A you both need to be registered self employed and also as a partnership. That means you have three sets of self assessment to fill in - one for the partnership and one for each of you with income/expenses for each being whatever percentage of the business A you each have - the combined total of both of your amounts on the S/E form must equal what is filled in for the partnership. If I were you, I think I'd be starting up a Ltd company in the same name with both of you being registered as directors and shareholders, closing the existing company. That way you restrict your liabilities if it all goes wrong and you can be a partner in the business without possibly dropping yourself in it for not registering last year although it may be possible to change the existing to a partnership however you need to speak to an accountant to find out the best route to take.

If you then start company B on your own, you need to fill in another section of the S/E for self employed income on your own form. Basically for each seperate business, you fill in a seperate section of the S/E form. Likewise if you had more than one PAYE job, you'd fill in a seperate page for each.

teddy1000

Very helpful reply. Thanks so much!