partners but both sole traders

[GQuigley67]

after some advice, I know I should probably speak to an accountant about this but thought I would try here first.

We are both working together, splitting 50/50 on van, van insurance, tools and sundries.

Company pays our wages seperate, would we be best to find the same accountant and tell them we are splitting the van etc 50/50, or form into a limited company or partnership and open a new bank account and pay each other a wage every week?

 

[lame plumber]

better get a partnership agreement and accountant asap, remember hmrc can chase either or both of you for taxes outstanding!!!!!!!!!

 

[Mrs Tara Plumbi]

I'm with you on this Lame.

Lts company might be best - accountant will advice you

 

[AWheating]

how are you both going to take half the van home?? sounds like a cut and shut to me

 

[Centralheatking]

You are treading on very dangerous ground here. My Mrs is a barrister that specialises in
law of contract so here we go
1. at present you will each be jointly and severally liable for each others activities
this means your partner (in law) could go lala and you will lose you house etc all his debts
and yours are all in the same pot

2. get out of this arrangement asap - its not an accountant thing its a legal obligation that you have not realised (or your partner)


If you want to ask Gill (my Mrs) more then wait until when we are back from hols 30 Aug but I would serve a dis-claimer on your trading partner and set out the criteria to be totally separate without
delay centralheatking

after some advice, I know I should probably speak to an accountant about this but thought I would try here first.

We are both working together, splitting 50/50 on van, van insurance, tools and sundries.

Company pays our wages seperate, would we be best to find the same accountant and tell them we are splitting the van etc 50/50, or form into a limited company or partnership and open a new bank account and pay each other a wage every week?

 

[Ray Stafford]

I'm with CHK here - I have seen plenty of partnerships go wrong over the years.

It can be the simplest things - lets say one of you gets sick. No problem for a while, but starts to be a drag after a while.

Or your other halves fall out.

Or one of you takes on an expensive committment, and wants to work all the hours god sends, but the other one wants to go fishing.

I could go on and on with different scenarios whereby two perfectly decent, well meaning and friendly partners could end up going their different ways. Much better to plan for all that now with a proper legal structure so that you can disentangle it all with the minimum of risk and fuss.

And the point about joint and several liability is an important one. Its not just HMRC that will come after you both. So will your merchant! We have had several cases where one of a pair has come to us and said "sorry, I have split up with my business partner, and he has gone to Spain. Here's my half of what we owe you..." and then be surprised when he finds he is also liable for the partner that did the leg-job.

 

[Ermintrude]

Yeh ltd company seems a bit of a stupid idea for two traders, for a start merchants And suppliers less keen to deal with new ltd companies due to difficulty recovering money. How is van going to work? U have it Monday you Tuesday? What happens when if you fall out? One of you is going to let other down and that's end if friendship? Why doesn't one of you own van and other pay towards fuel and maintenance? The other owns company as far as hmrc are concerned? Another trick would be to have two ltd companies one each, you have a trading name ? Bobs brilliant boys? Company one has all the money paid to it, company two invoices company one for labour and running costs? Company two pays its director at national min wage and then pays him a dividend - you avoid tax only pay cooperation and employers ni? Company one pays materials and director same as company two? You can do own accounts but company one should be vat registered !

 

[lame plumber]

that sounds like tax avoidance to a simple man, got to have a better plan than that

 

[deandive]

love tax avoidance me. George Osbourne can.............................................................................

 

[Ermintrude]

It's not tax avoidance , you are not google or freakin Starbucks. You will be paying nearly 25% tax on earning over £40k.

Have any of you been on corgi vat saver? Now that's a scheme to avoid! You pay them for a wideboy vat receipt and they take none of the blame when revenue kicking in your back door!