In a partnership but opening a second business

Kayalana99

If you open a second business do you just keep the accounts separate and declare them to HMRC when you do the tax return as the individual? Or do I somehow need to claim I am running a second business?

I have spoke briefly to my accountant but his advice is to run it through the partnership to make it easier but I'm not keen on this as in the long run I wish to close the partnership but carry on with my new business. (The types of the two businesses are sort of related so it could be argued that it is an add on to what we are doing)

Many thanks in advance.

paddyrg

I'm sort of suggesting the opposite, closer the partnership sooner and go it alone. It's what you intend to do anyway, and if you're kinda going into competition with yourself anyway, that's already the spirit of the partnership gone.

But I digress. Go back to your accountant and tell them that you don't want to put it through the partnership and to answer the question on that basis. They work for you, after all!

antrobus

Kayalana99 wrote: »

...I have spoke briefly to my accountant but his advice is to run it through the partnership to make it easier but I'm not keen on this as in the long run I wish to close the partnership but carry on with my new business. (The types of the two businesses are sort of related so it could be argued that it is an add on to what we are doing)....

Then you should speak to your solicitor first.

As in the 'long run', your fellow partner could well decide to sue your posterior if you adopt plan A. If it "could be argued" that your new business is an "add on" to the partnership business, then it could be argued in a court of law, that your had not acted in good faith and should cough up any profit to the partnership.

http://www.slatergordon.co.uk/partnerships/duties-of-partners-to-each-other-and-to-third-parties/

I'm not saying that will happen. I am not a lawyer, and don't know the detail, but you should really speak to a proper lawyer before you do anything.

Kayalana99

Just to add light, the partnership is between me and my Husband and the businesses are separate and not in competition with each other and 100% different in a lot of ways - but the new business could technically be ran under the same name in the eyes of HMRC as they are not like running a shoe shop and a chip van but more like running a clothing shop and a clothes fashion show.
They are in the same sort of industry.

The partnership will close when the second business starts making enough income which may not be until 2017/early 2018 that we no longer need to run the 1st business.

There is no problem with the partner as we are on the same page and he works full time so whilst he is a partner and helps me he the business is essentially in my hands.

Mistral001

To me it appears that you are making things more complicated than they need to be. The accountant is probably thinking along the same lines as this. It will save you accountancy fees(and legal fess no doubt) as far as I can see to just run the second business as part of the partnership.

Kayalana99

Thank you I think you are right I will just run it together. I have a habit of making things more complicated then they need to be.

paddyrg

I think that's probably a prudent decision