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setting up in partnership
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my hubby has recently started his own business in bricklaying/building. If he gets a big extension to do and cannot do it on his own would he be better to go into partnership with someone else (there is a possibility of someone he used to work with) or turn the job down and continue doing smaller jobs. I'm don't really understand the tax implications of working with someone else or how they would pay for materials etc. He definitely doesn't want to employ anyone but is considering getting in touch with a bloke he used to work with. Any advice?
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well I didn't really mean just for 1 job! its just something he is thinking about because at the moment he is getting by doing smaller jobs but it got us thinking if he were to get an extension he wouldn't be able to do it on his own and he does know this bloke he may be interested in working with him. They nearly did it before only that was in new build but they lost out on land at an auction.
The most useful and independent advice that I can suggest is here Tiggy.
http://www.businesslink.gov.uk/bdotg/action/la yer?topicId=1073864308&r.s=sl
Business Link is a non-profit organisation run through Government. I suggest you have a read then ask us more questions if you need to.
Tax is covered in it - basically each partner deals with his/her own tax affaris as if he/she is self-employed. There are no tax advantages in doing it - just a sharing of resources, knowledge and skills to help with running the business. There are downsides too - if the partnership falls apart what happens? - these are best sorted upfront through some form of partnership agreement that set-out the 'rules'. These rules are designed by the partners themselves.
Most partnerships would set up a business bank account in the name of the partnership and buy materials through that.
http://www.businesslink.gov.uk/bdotg/action/la yer?topicId=1073864308&r.s=sl
Business Link is a non-profit organisation run through Government. I suggest you have a read then ask us more questions if you need to.
Tax is covered in it - basically each partner deals with his/her own tax affaris as if he/she is self-employed. There are no tax advantages in doing it - just a sharing of resources, knowledge and skills to help with running the business. There are downsides too - if the partnership falls apart what happens? - these are best sorted upfront through some form of partnership agreement that set-out the 'rules'. These rules are designed by the partners themselves.
Most partnerships would set up a business bank account in the name of the partnership and buy materials through that.
I have to say that I don't blame him for not wanting to employ someone, as the CIS taxation scheme would involve him in allsorts of paperwork. As would hiring someone on the PAYE scheme.
It may be best though. If the job then worked out, he's already broken the back with registering with the Revenue for the future when he gets other big jobs. They will help with the paperwork, and as long as he doesn't forget to file stuff (which he already has to do anyway, being self employed, I gather) he'll be fine. Tell him to go to his accountant or whoever helps him with his tax returns - there'll be loads he can do.
If he goes in for the job with his mate as two separate builders it has to be done properly. Just going halves on everything could end up in even more paperwork if his partner starts acting up on who paid for which particular batch of bricks or whatever, never mind the insurance claims if something goes t up .......
It may be best though. If the job then worked out, he's already broken the back with registering with the Revenue for the future when he gets other big jobs. They will help with the paperwork, and as long as he doesn't forget to file stuff (which he already has to do anyway, being self employed, I gather) he'll be fine. Tell him to go to his accountant or whoever helps him with his tax returns - there'll be loads he can do.
If he goes in for the job with his mate as two separate builders it has to be done properly. Just going halves on everything could end up in even more paperwork if his partner starts acting up on who paid for which particular batch of bricks or whatever, never mind the insurance claims if something goes t up .......
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