help! self employed, can i change from sole trader to partnership!

jedi_cooky

apologies if this is a bit heavy for a friday afternoon but i cant find any info the the hmrc website.

i have been trading on ebay for the last 3 months and am just about to register as self employed. i have been doing this from my parents house alone. my girlfriend and i have just bought a house and she will be helping me with the business when we are living together.

my question is this, if i register as a sole trader for the tax year just gone, how easy is it to change the status to that of a partneship once we are living together (and sharing the profit!!)

thanks, adam

WHA

jedi_cooky wrote: »

apologies if this is a bit heavy for a friday afternoon but i cant find any info the the hmrc website.

i have been trading on ebay for the last 3 months and am just about to register as self employed. i have been doing this from my parents house alone. my girlfriend and i have just bought a house and she will be helping me with the business when we are living together.

my question is this, if i register as a sole trader for the tax year just gone, how easy is it to change the status to that of a partneship once we are living together (and sharing the profit!!)

thanks, adam

No problem really. Just tell HM Revenue & Customs and get your partner to fill in form CWF1. You'll have to split the accounting period into when you were a sole trader and when you were a partnership, but as long as you have good book-keeping, that should be easy enough. Your next years tax return will be more complicated as you'll have a self employed section for your time as a sole trader and a partnership section for your time as a partner. Also your partner will have a tax return to complete next year and there'll be another tax return for the partnership itself.

Other things to deal with - you'll need a joint bank account for the business instead of it being in your name only - you'll need to notify your business insurers - you have to put all partners' names of official paperwork - you'll both be liable for the partnership debts which means that the business creditors can come after either of you for the full amount, not just your own half. I'm sure someone else will come along with other points.

jedi_cooky

thanks for the advice, my books are very straightforward, buy, sell and costs!!

business insurers?? we just buy and sell on ebay, i have no debts, i just buy my stock outright and then sell it. should i be having some business insurance? is that a requirement by law?