My business partner recently registered our partnership for self assessment on HMRC online, by submitting online forms. The form's he completed are as follows:
1. Registering a partner for self assessment and class 2 NIC's.
2. Registering a partnership for self assessment.
3. Become self employed form.
Firstly I am not 100% sure that these are the correct forms to complete. I believe that the third form was not needed as the first form should automatically enroll him for self assessment. Is this true and what issues could the extra form bring up?
Secondly as the business has not purchased or sold anything at all as of yet, was there any point in registering the partnership or ourselves for self assessment so soon? If not, is there any way to cancel an online form submission to HMRC before it is processed? We signed a general partnership agreement on the 09/02/2015 (last week).
If these forms are correct, and it's okay for us to have submitted them so soon then should I go ahead and complete the first form myself also?
We will be speaking to an accountant next week and i have tried and failed to get through to HMRC by phone numerous times. I am very worried that we have made mistakes that could cost a lot of money.
Please give me a hand here, and thanks in advance!
Replies (11)
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There is nothing to worry about and there was no need to try to contact HMRC. Registering too early is probably better than registering too late. The main thing to watch is that you don't get charged Class 2 NI for periods before you actually start trading.
Your accountant will deal with everything for you. With respect, if you have already engaged an accountant I am not sure why you initiated this post.
Possibly there will be an issue with your partner having two UTR numbers, but if that's a problem it's his not yours isn't it?
Partnerships
Personally, I prefer a limited company to a partnership.
If things go sour, it's very difficult to leave a partnership.
Something else to discuss with your accountant ..........
Partnerships
Personally, I prefer a limited company to a partnership.
If things go sour, it's very difficult to leave a partnership.
I am not particularly promoting partnerships. I agree that very often a limited company will be the better option for a variety of reasons. But, as always, there are pros and cons of both structures. I am puzzled that you say that the difficulty of leaving is a "con" of partnerships. But surely the reality is the opposite. Much easier to walk away from a partnership and withdraw one's capital (without tax consequences of course) than to negotiate a disposal of one's shareholding in a company, which is of course fraught with difficulty and full of tax consequences. Surely when it comes to transparency a partnership wins hands down.
Clean Break
Personally, I prefer a limited company to a partnership.
If things go sour, it's very difficult to leave a partnership.
I am not particularly promoting partnerships. I agree that very often a limited company will be the better option for a variety of reasons. But, as always, there are pros and cons of both structures. I am puzzled that you say that the difficulty of leaving is a "con" of partnerships. But surely the reality is the opposite. Much easier to walk away from a partnership and withdraw one's capital (without tax consequences of course) than to negotiate a disposal of one's shareholding in a company, which is of course fraught with difficulty and full of tax consequences. Surely when it comes to transparency a partnership wins hands down.
I wasn't particularly replying to your post, John.
However, since you raise the point, leaving a company means that you leave its debts and contracts. Which is not always the case when you leave a partnership. Each creditor has to be notified that you are no longer a partner and you remain liable for any debts contracted prior to the date of leaving. A clean break is not possible.
yes in my experience if not registered before
You have to register as self employed and as a partner
Also
Get a proper partnership agreement at least! Preferably drawn up by a solitictor too.
ignore the commenst of no use to you , hate them
is it an LLP or an unincorporated partnership