Paying for partnership accounts after leaving partnership

pennyprawn1980

I wonder if anybody knows where I legally stand with the following scenario?:

I was in a partnership running a small business which I left in July 2013, leaving my ex business partner to run the business as a sole trader.

I've just received a bill from an accountant who has worked out the accounts and submitted the partnership tax return for the business for 2013/2014.

Seeing as I left the partnership 3 months into the financial year, am I liable to pay for this, or as I'm no longer part of the business, should I tell the accountant that the bill should be paid by my ex business partner?

Something to note is that the bill is split 50-50 and I wasn't consulted/asked whether I wanted to pay somebody to do this.

I would greatly appreciate any advice on where I legally stand.

Savvy_Sue

Legally, did you formally end the partnership? Did you get advice on how to do that without leaving yourself liable for anything?

Or did you just informally leave, as it were?

I think the answers to that will make a difference to what people say.

Mistral001

I should have thought that the partnership agreement would have a large section devoted to what should happen when the partnership is dissolved. In other words look at the partnership agreement.

pennyprawn1980

We were a very small company based at home. We had a bank account and registered with the inland revenue but we didn't have any contracts drawn up. We had an informal agreement that I would handle any contact with shops we sold to and she would deal with the accounts as her then husband was able to do this. She split from her husband so she then sent accounts to an accountant. I paid half of the bill for the previous financial year 2012-13, even though I had already left the company, however she has presented me with half the bill again for 2013-14. I was officially part of the company until July 2013 as this is when I had my baby and informed inland revenue that I had left the partnership.

zygurat789

Surely the accountants bill is charged in the accounts and you will have had a share of those profits, albeit not for the full year. You should have had a balance on your capital account showing you either owed money to or were due money from the partnership. When the capital account has been settled the accountants bill has been included.

Mistral001

This reminds of the story of the man who loaned a friend £20 and then did not see the "friend" ever again. Looking back on it philosophically he said it was the best £20 he had ever spent.

Pennywise

If the business had ceased on the day you left the partnership, there'd have been very similar accountancy costs to prepare the accounts for those final few months and the 13/14 partnership tax return, both of which need to be done whether the business stopped or carried on. You'd not have been surprised to have to pay half of the accountancy bill in those circumstances would you? In fact, you leaving the partnership may well have increased the accountant's time to deal with the partnership split, so the accountancy fees could well have been higher because of you leaving. I'd say they're well within their rights to ask you for half the accountancy fees in the absence of any agreement between you otherwise, i.e. in the absence of a partnership agreement that would have set out this kind of thing.