someone talk to me about partnerships in easy laymans terms

[Donkey]

Dh and I both registered childminders, both working together from the start of this financial year

I am thinking having 1 set of accounts and splitting the profit would be easier than having 2 lots of accounts and splitting expense???


but I have no clue on partnerships

any help would be appreciated!!

[Stapleton83]

Ok a partnership is basically an agreement between two or more parties in business together. In essence unless otherwise stated in a partnership agreement each partner is liable for the debts as well as the income. It isn't massively more difficult than being a sole trader.

If you are setting up from scratch then it is worth talking to someone like Barclays who offer fact sheets about these kind of things or try someone like Businesslink for some help. Some accountants also offer free advice sessions so it might be worth seeing if you can find someone who can give you a little bit more info.

Hope that helps a little bit.

Sam x

[Chatterbox Childcare]

I have done this for myself and DH but what the HMRC don't tell you is that unless you start trading on the first day of your financial year you have to split your accounts mid year depending on when you register the partnership with the HMRC. I got caught with this and registered in Oct, didn't know about splitting the accounts so I completed the return with nil balance and then we started on 1st April.

It sounds very muddled but basically all you need to do is go online and register the partnership and the HMRC will send you a notice accepting it and then at tax time you complete a return for the partnership, splitting profit any way you want, and one individual ones for the people in the partnership.

Again, I got caught, the partnership needs to be done by the end of July and I had to pay £25 for software to do it (cheaper than the fine) and now I finish my accounts to Profit and Loss stage and the accounts audits and amends it and completes the returns for me

Anything else you need to know, please pm me as I get notifications for that and I hope that helps