Considering BR - PAYE & Self Employed Help Please

AspirinRequired

This is my first post here but I've been lurking for a couple of week as I do the necessary research into going BR. I'd really appreciate any help on the following.

A little bit of info. I'm both PAYE and self employed in a limited liability partnership. My PAYE job earns the majority of my income. I find myself in a position where my borrowings have added up to a point where I'm struggling to pay them, and the partnership I have is on the decline and we are about to close it down. There are no business debts.

1) I will owe income tax to HMRC come end of January and not have the funds to pay. I've not yet done the Self assessment although I know a ballpark figure.

Should I close down the partnership now or leave it running?

Should I do the self assessment to get an exact figure of what is owed?

Would it be worth trying to pay the tax bill by hook or by crook and go bankrupt afterwards (as it seems I'll probably have to due t unsecured debts)?

I'm feeling absolutely desperate at the moment and don't know which way to turn for the best. Any help would be greatly appreciated.

mwarby

The partnership would depend on what the other partner(s) wanted, afaik you won't be able be part of it while bankrupt

Re the none paye tax, this will be the responsibility of the partnership won't it ?

I'd say you need to seek professional advice, I know there are issues with not paying taxes, but there are also issues in preferentially treating a creditor

I wouldn't fret too much about the tax, it starts to become a bigger problem if you stop doing returns or ignore demands for payment, which it sounds like isn't the case

AspirinRequired

The other partner is a relation of mine (cousin), and is happy to shut it down. The structure of the limited partnership is that we each do our own self assessments and are taxed on our share of profits (50/50).

KeepOnKnitting

I think you would legally be able to continue the partnership even while bankrupt. Bankruptcy just stops you being a director of a company, which I understand to be different to a limited liability partnership.

Not that this changes your position with a business that isn't worth continuing. I only make the point because I continued as a sole trader once bankrupt with no changes to my business.

Don't rush or stress about the tax, take a breath and get on the phone to business debtline to chat. It's not as urgent as you think it is.

Flyright

You can't continue a partnership in the event of one of the partners becoming bankrupt.

KeepOnKnitting

Flyright wrote: »

You can't continue a partnership in the event of one of the partners becoming bankrupt.

I disagree based on my reading of this link, which could be out of date but presumably was correct at publication, being from the insolvency service. The partnership may be dissolved by the partner's bankruptcy if this was agreed by the partners, but I don't think it HAS to be ended.
https://www.insolvencydirect.bis.gov.uk/casehelpmanual/P/Partnerships.htm