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#81

Especialy someone so reluctant to have their name on the partnership!!

#82

You have a choice, operate as a partnership or the ‘partner’ is your employee (sole traders can have employees) and salaried. You are going to need an accountant either way unless you know how to setup a partnership or run PAYE payroll accounting.

#83

I feel that you could be storing up a whole lot of trouble with this approach. You need to get some legal advice. My advice would be not to go into partnership with someone else unless all all legal and financial obligations are agreed and documented, and even then I would hesitate.

#84

He would be paying the extra taxes lol, at the end of the day the money that will be entering his account will be sent by me… so he has no choice other than to split the taxes. Plus we have been good mates for a long time, he has already acknowledged whatever his share of taxes will be, it will get cut from the amount i will be paying him…

#85

How old are you if you don’t mind me asking
And what’s your current employment status ?

#86

He’s either a partner, or he’s an employee

If he’s an employee then you need to work out an employment contract, guaranteed working hours, minimum guaranteed wage, holiday pay, sick pay, PAYE etc.

#87

19 years old, and im employed… working part time

#88

So you are already earning and using your tax allowance

What about your partner ?

#89

Which is wonderful - in spirit. The point of setting up legal frameworks in the first place is that you do so in the most tax efficient manner possible.

If you work as a sole trader - do you even know how to pay your ‘mate’ and how to account for it? You cannot just give someone money when you are in business. There needs to be a legal agreement, documentation of how it is paid and what the payment is for.

At the very least they are going to be self employed and invoicing you for their services but there is a good chance you could fall foul of IR35 and HMRC determines that you are their employer - which would also mean you are responsible for National Insurance, sick pay, pension and other working benefits.

You REALLY need to speak to an accountant.

#90

He doesn’t work… he’s in education, whereas i decided to leave that to try and start other sources of incomes

#91

So he won’t have to declare income then to get a student loan - brilliant

#92

yeah it makes sense, then as soon as he leaves it he will put it on his name as well. Im just wondering what to do for the remainder of the year… whether to go into it as a partnership or a sole trader and have my mate as an employee…

#93

I think you will need to educated yourself on business practices, accounting and a whole host of other things if you wish to earn a living this way. It is not as simple as selling your pre-owned goods on ebay. You have an obligation to your customer to ensure any goods you sell are safe, an obligation to HMRC to pay your taxes. Please do your homework before you proceed any further.

#94

I’m sure he’ll be grateful to you for paying his pension…

#95

I have done my homework on this… just not on partnerships which is what im struggling with

#96

You need to speak to an accountant to know the ins and outs and pros and cons of both

I’m trying to avoid staff for as long as humanly possible! Thats a rabbit hole I don’t want to go down

#97

So you know about all your legal obligations to taking your mate on as an employee?

#98

no… i just said “im struggling with this part as i don’t know how to go into business with partner”

#99

I suggest you have a look at HMRC’s website -
https://www.gov.uk/hmrc-internal-manuals/partnership-manual/pm130000

#100

you really need to speak to an accountant, and to him, and then make a decision - preferably the accountant first so you know what the pros and cons of each option are.