Sole trader , complete beginner

bobbynobs · 1 April 2019 at 10:54AM

Hi , i hope you dont mind me asking for a bit of advice . Me and my wife both work full time , but we have just acquired an ice cream van . My question regards registering with the hmrc regarding tax . I earn about 33,000 pa and my wife about 16,000 pa . i have looked on their website and cannot seem to find out how the tax we owe as a couple will be paid . I obviously wouldn't want to go over the 40,000 tax threshold if i can help it , so is it possible to combine our income or would it be better and legal to register in my wife's name . Thank you for any help you can give me

Pennywise · 1 April 2019 at 11:26AM

Registering it as a partnership may be the answer, then you can share profits in any proportion you choose as long as you both work in the business, i.e. you could allocate all the profits to your wife, or say 75:25 if a 50:50 share would push you into higher rate. You can also change the profit sharing ratio each year to suit.

Savvy_Sue · 1 April 2019 at 6:57PM

As Pennywise suggests, a partnership may be the answer. But worth saying that as a couple, you do not owe tax: you owe it as individuals and that's how it's calculated.

And what Pennywise did NOT say is that you will then need to do three tax returns each year: one for you, one for your wife, and one for the partnership. My advice: get an accountant to explain all this to you! And keep meticulous records ...

bobbynobs · 2 April 2019 at 12:14AM

Thanks for you replies , looks like it will be too complicated for me to do myself . Time to look for an accountant .

martindow · 2 April 2019 at 12:23PM

bobbynobs wrote: »

Thanks for you replies , looks like it will be too complicated for me to do myself . Time to look for an accountant .

Good idea to speak to an accountant, but you need to keep the accounts so you know how well your business is going. The more you can do to get the accounts ready, the less the accountant will charge you. If after taking the accountant's advice you feel confident to do so, you may wish to draw up the accounts and deal with tax yourself

tacpot12 · 2 April 2019 at 2:31PM

The accountant may also suggest registering a limited company. This might provide some useful protection given that you are serving a foodstuff and could be sued if you make someone ill.

Having the right insurance for the business is also something the accountant may be able to advise on, but a good insurance broker should be able to explain the risks that your business will face and how you might insure against these. Do be aware that their job is to sell insurance though...

Mistral001 · 2 April 2019 at 4:29PM

tacpot12 wrote: »

The accountant may also suggest registering a limited company. This might provide some useful protection given that you are serving a foodstuff and could be sued if you make someone ill.

Having the right insurance for the business is also something the accountant may be able to advise on, but a good insurance broker should be able to explain the risks that your business will face and how you might insure against these. Do be aware that their job is to sell insurance though...

Good point about insurance. I am not so sure how being Ltd will protect you further from matters such as someone falling ill from one of your products if you are covered by insurance.

TripleH · 8 April 2019 at 8:02PM

If they are trading as a limited company it is the company that will have to be sued restricting their liability. It might make sense to look into a limited liability partnership instead. Just like a partnership but limits the partners exposure. (This explanation is simplified)

bobbynobs · 9 April 2019 at 9:00PM

Thanks again for your replies , public liability insurance £5 million cover is about £70 a year which i dont think is too bad .

Sole trader , complete beginner

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