Starting up as a sole trader in partners name

ECSD

Hello, 

My partner is thinking of becoming a sole trader but for various reasons we are thinking of setting up the business in my name. The business would primarily involve installing stairlifts and supplying mobility aids. 

We are unsure if the business was set up in my name with HMRC would all the insurance also need to be in my name? If so would he be covered for any work carried out? 

We are also not 100% sure of any legal implications involved if we were to do this. 

We both work so it wouldn’t make a difference tax wise as we would end up paying the same tax no matter whose name it is in. 

Would we be best moving assets over to one name and setting up the business in the other? 

Has anyone done this and has any advice?

Thanks 🙂

stig

Not sure at all what you mean. The “sole trader” will be  the person who is doing the self-employed work -are you suggesting lying to customers and HMRC about who the sole trader is? 

If your partner is intending operating as a sole trader, he simply registers as such in his own name, there’s no separate business entity to create. He’ll also need to be the one who takes out business insurance in his name.

if you both intend operating the business, you could always set up a partnership and simply allocate 100% of the profit to you, with you both as partners registered with HMRC. But if the business will be entirely your partners then no, you can’t pretend to HMRC that it is you who is self-employed. 

If your partner is in fact considering operating through a limited company with you as shareholder, that’s a whole different kettle of fish!

General_Grant

ECSD said:

Hello, 

My partner is thinking of becoming a sole trader but for various reasons we are thinking of setting up the business in my name. The business would primarily involve installing stairlifts and supplying mobility aids. 

We are unsure if the business was set up in my name with HMRC would all the insurance also need to be in my name? If so would he be covered for any work carried out? 

We are also not 100% sure of any legal implications involved if we were to do this. 

We both work so it wouldn’t make a difference tax wise as we would end up paying the same tax no matter whose name it is in. 

Would we be best moving assets over to one name and setting up the business in the other? 

Has anyone done this and has any advice?

Thanks 🙂

Your partner could register as self-employed (which is what a sole trader is) and trade using a name which happens to be the same as yours.  He would need a business account which would be in the name of the business, viz "John Fisher trading as Janet Doe".  Insurance would be for the same.

Are you married or in a civil partnership?

Jillanddy

If there is no financial benefit, even if it can be done, should it be done? It seems like an odd arrangement. You are suggesting putting assets in one name and the business in another? That just screams the question "what are you trying to hide / avoid?". To say nothing of potential risks to one or the other if you split up. I've only ever heard of such arrangements being done in relation to limited companies. And usually exactly because they are definitely hiding something. 

Andy_L

"Naming your business

You can trade under your own name, or you can choose another name for your business. You do not need to register your name.

You must include your name and business name (if you have one) on official paperwork, for example invoices and letters."

https://www.gov.uk/set-up-sole-trader

IMO you'd be better off using a business name, eg "super stairlifts" than your name instead of his as seeing 2 different names on the paperwork would just feel iffy to me as a customer

Tigsteroonie

Are all the family assets currently in his name, and he's scared that if the business doesn't work out then those assets could be taken off him? Is that why you were considering the business in your name or alternatively transferring all assets to your name?

And when you read it like that ^^^ does it sound kosher?

ECSD

stig said:

Not sure at all what you mean. The “sole trader” will be  the person who is doing the self-employed work -are you suggesting lying to customers and HMRC about who the sole trader is? 

If your partner is intending operating as a sole trader, he simply registers as such in his own name, there’s no separate business entity to create. He’ll also need to be the one who takes out business insurance in his name.

if you both intend operating the business, you could always set up a partnership and simply allocate 100% of the profit to you, with you both as partners registered with HMRC. But if the business will be entirely your partners then no, you can’t pretend to HMRC that it is you who is self-employed. 

If your partner is in fact considering operating through a limited company with you as shareholder, that’s a whole different kettle of fish!

Thanks for your reply. It would be my partner who is doing all the ‘hard’ work and then me doing all the paper work at home. So I suppose technically it would be both of us running the business. 

We just aren’t sure about how insurance would work if I was the one who was classed as self employed as the money made would be put into a joint pot. If we are putting the insurance in his name then would the ‘paper work’ for the business need to all be in his name too for HMRC? 

(There would be not tax benefit of us doing this. Purely for other reasons) 
thanks 

ECSD

Jillanddy said:

If there is no financial benefit, even if it can be done, should it be done? It seems like an odd arrangement. You are suggesting putting assets in one name and the business in another? That just screams the question "what are you trying to hide / avoid?". To say nothing of potential risks to one or the other if you split up. I've only ever heard of such arrangements being done in relation to limited companies. And usually exactly because they are definitely hiding something. 

I understand it does sound an odd thing to do, which is why we aren't sure if it even can be done. It's more to protect the house and family car if things were to go seriously wrong within the business. 
Is this a done thing when becoming a sole trader? We would both be putting work in the business venture but only one of us would be classed as self employed as we would both be staying in our current jobs until we could/if we could afford to do this as our main income.

ECSD

General_Grant said:

ECSD said:

Hello, 

My partner is thinking of becoming a sole trader but for various reasons we are thinking of setting up the business in my name. The business would primarily involve installing stairlifts and supplying mobility aids. 

We are unsure if the business was set up in my name with HMRC would all the insurance also need to be in my name? If so would he be covered for any work carried out? 

We are also not 100% sure of any legal implications involved if we were to do this. 

We both work so it wouldn’t make a difference tax wise as we would end up paying the same tax no matter whose name it is in. 

Would we be best moving assets over to one name and setting up the business in the other? 

Has anyone done this and has any advice?

Thanks 🙂

Your partner could register as self-employed (which is what a sole trader is) and trade using a name which happens to be the same as yours.  He would need a business account which would be in the name of the business, viz "John Fisher trading as Janet Doe".  Insurance would be for the same.

Are you married or in a civil partnership?

We aren't married or in a civil partnership. We have lived together for 5 years and have a mortgage and children together if that makes any difference? That being the main reason we would want to do as much as we can to protect our house and family assets. 

noitsnotme

You seem to be needlessly complicating things.  If you’re dead set on protecting personal assets then set up a limited company with both of you as directors or him as director and you as an employee.

Although even that might be overkill.  Is there a huge risk of your personal assets being at risk?  Are you thinking of taking out large business loans or is there a risk you might get sued through shoddy work?

Jillanddy

ECSD said:

Jillanddy said:

If there is no financial benefit, even if it can be done, should it be done? It seems like an odd arrangement. You are suggesting putting assets in one name and the business in another? That just screams the question "what are you trying to hide / avoid?". To say nothing of potential risks to one or the other if you split up. I've only ever heard of such arrangements being done in relation to limited companies. And usually exactly because they are definitely hiding something. 

I understand it does sound an odd thing to do, which is why we aren't sure if it even can be done. It's more to protect the house and family car if things were to go seriously wrong within the business. 
Is this a done thing when becoming a sole trader? We would both be putting work in the business venture but only one of us would be classed as self employed as we would both be staying in our current jobs until we could/if we could afford to do this as our main income.

Understandable. And equally so why you want to protect your home.  

Do you get why your clients might want to protect theirs?  Do you not care about them? 

Because, you know,  I'm disabled and I'm lucky - I have an income and money behind me.  Many don't.  So what are you protecting yourselves against? You are trying,  whether successfully or not,  to hide your assets to protect yourselves, at the expense of disabled people.  

Why is my home less important than yours? 

Set up a limited company and get insurance that protects both of us. I'm smart and savvy enough to check that.  Many disabled people may not be.