New business - registration.

Seanymph

My husband and I are buying a small inn.

We have been advised to run this (profit c50k) as a partnership. I have worked as a sole trader, and a limited company, but a partnership is new to me.

Do we need a partnership agreement, or does being married negate that?

I am registered for self assessment - he is not yet.

Do we need to register the partnership? Or both complete self assessment forms?

CityLite

Seanymph wrote: »

My husband and I are buying a small inn.

We have been advised to run this (profit c50k) as a partnership. I have worked as a sole trader, and a limited company, but a partnership is new to me.

Do we need a partnership agreement, or does being married negate that?

I am registered for self assessment - he is not yet.

Do we need to register the partnership? Or both complete self assessment forms?

https://www.gov.uk/set-up-business-partnership

00ec25

appreciate from the outset that "the partnership" is an entity in its own right, although liability remains with the actual individual partners.

However, "you" will need to submit THREE tax returns:
Mr's personal tax return covering his share of the profits
Mrs' personal tax return covering her share of the profits
The Partnership's tax return showing the profits !

partnership accounts can be awkward and a somewhat specialist area, you may need to choose an accountant with care!

Seanymph

Thank you - like I say I've done a Ltd Company, and completed self-assessments but I've always had an accountant who was very 'light touch' - he just did the end of year from my records with the Company.

He has said unless we move into the 40% tax bracket then no point in anything other than a partnership - but because he's used to being so hands off I'm not sure he's the man for this change for us.

I am a confident book keeper - but I think I'll take your advice on board to choose my accountant with care - what do I look for though? How do I know? Any tips?

Camster

I've had a partnership with my wife in a small business for many years, and have found that everything is fairly straightforward.

All you need to do is submit your individual self assessments and a partnership one.

You need to decide how you will split any profits made by the partnership, and my accountant advised me at the start of our partnership, that for husbands and wives, HMRC allow you to decide for yourselves how to split the profits.

This might allow you some tax advantage depending on each partners tax liabilities.