What is a partnership?
A partnership, which works in a similar way to a sole trader but with 2 or more people. A written agreement should be in place between the partners and profits are usually shared between the partners according to the agreement. Though profits may be shared unequally, liabilities which may arise are shared jointly. This is something that everyone involved in partnership, should be very clear about. Even if you only own 1% of the business you will still be responsible for 100% of the liability.
What to do when you are in partnership.
- Register as a self-employed with HMRC within 3 months of your setting up
- Pay Class 2 National Insurance contribution – HMRC will send you Class 2 National bills every quarter, unless exempted due to small earnings.
- Set up a separate business account If possible – Ask us if you need to open an account
- Complete an individual Self-Assessment tax return. You’ll also have to fill in the partnership supplementary pages – SA104.
- The nominated partner must also complete a Partnership Return – SA800 – showing each partner’s share of the profits or losses.
- The nominated partner is responsible for sending in the partnership return but you’ll be jointly liable with your other partners for any penalties, surcharges and interest if the return is late or inaccurate.
- Both Partners are personally liable to pay tax on their share of the partnership profitsaccording to the tax band they fall in.
- Both Partners are personally liable to pay Class 4 National insurance contribution on any profits above certain limit.
- Register your Business for VAT if turnover is above the VAT threshold.
- If you have employees, you should set up a PAYE system to collect income tax and National Insurance contributions.
- Keep records of all Sale invoices
- Keep records of all Purchase invoices Expenses – if you are our client, you can request us a list of possible allowable expenses. This will give you an idea what you can and can’t claim for.
- Keep records of business bank statements Keep Record of VAT – if registered
- Keep record of all the employees & casual labour
- Keep records of business credit card statements if any.
- Keep records of any other information which you believe is relevant.
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What is included in OUR FEE?
- Free initial Consultation.
- Register you as a sole trader
- Register your business as a partnership
- Prepare & file partnership tax return
- Prepare & file Self-Assessment tax return for each partner
- Guide you how tax system works in UK- Tax, N.I rates etc
- Guide you how to keep good records,
- Guide you if your business needs to be registered for VAT, Explain you about available VAT schemes.
- Provide you list of possible allowable expense
- Advise you about the tax liability & dates
- Act as an agent on your behalf and deal with HMRC.
- Email and telephone support throughout the year.
- ACCOTAX – Bookkeeping software
- Tax planning