A new client has come to me as a sole trader commercial window cleaning business for 2018/19. His wife's only income for 2018/19 was a very small amount of self-employed freelance work with a turnover below the £1k trader allowance (previously in full time employment for earlier tax years). His wife did work with him on one of his contracts throughout the year although wages were not specifically recorded. Funds have been transferred to their joint personal account (not specifically for her wages, but a combined transfer of earnings/profits) so I think that we can justify a £5k salary to use at least part of her wasted PA without the need for a PAYE scheme (not in place). Overall profits are £30k and his wife has also assisted with invoicing and bookkeeping.
Ideally this would be set up as a partnership although, if done for 2018/19, it would be a late registration etc. and, as the paperwork (bank, invoices, letterheads, insurance) makes no reference to her name (sales invoices are in a trading name only i.e. not Mr X T/As but just the business name but the bank account is in the husbands name only) or a partnership I don't see this as possible - correct?
All that said, they have been working in this business together with profits transferred to a joint account. Is there are justification to treat this as a partnership from 06/04/19 onwards or should it only be from the point that a partnership set up intention is documented?
As a husband and wife operation at what point does the business become a genuine partnership for HMRC purposes?