Being in a partnership means being a sole trader except that you are not alone, but have joined with someone else. In almost every other way the regulatory framework is the same.
Must prepare accounts in accordance with FRS102 (section 1A if applicable). Cash accounting is permitted. In practice most small partnerships simply add up their income, add up their expenditure, and include these two numbers on their Partnerhsip Self Assessment tax return (SA800). The SA800 shows the profit split between the partners, which they then enter on their individual Self Assessment returns (SA100).
Subject to income tax and Class 2 and 4 National Insurance. The regime for deduction of expenses is the same as for corporate bodies. Must complete the SA800 (see above).
- Easy and cheap to start – you need a partnership agreement and to just register with HMRC
- A partnership agreement can state social goals, and some worker co-operatives are set up as partnerships
- Tax regime is easy to negotiate and reasonably benign
- No audit or any kind of external verification of accounts is ever required
- No limited liability
- No social investment routes available
- Accounts preparation
- Partnership Tax return SA800
- Payroll (if employing people)
- VAT advice, if necessary
- Book-keeping, if required