[Avatar]

Switching from sole trader to parnership

14/05/2019 06:35:15
I have been selling and fitting Blinds as a sole trader for 17 years. In April 2018 my wife finished her job and joined me in a partneship. So the business is the same but we hwve registered as a partnership and are both involved equally.. When i (and my wife) fill in our self assessments should I continue to fill in the section that says earnings from self employment, as I did previously, because if I do my tax is being calculated on the whole amount the business profit and not half. Or do I no longer fill in that page ? Its really confusing and despite phoning up and speaking to someone after a lengthy wait I'm still no wiser. Or because we registered as a partnership starting 06 April 2018, did my self employment end at thet time?
[Avatar]

Re:Switching from sole trader to parnership

14/05/2019 08:59:17

Hi

If you have a change between self-employment and a partnership then don’t think of it as a "sole trade" or "partnership". Think of it in terms of a business. Usually the business continues to prepare accounts to the same date whether or not it becomes a partnership during the account period. If you accounting period is the 06/04/18 to the 05/04/19 for the partnership and you and your wife have been trading as a partnership since that date are you saying that you ceased as a sole trader on the 05/04/2018? If so you and your wife will complete a SA104 Partnership supplementary page with the individual return and declare 50 50 profit and expenses if this is how the allocation of the profit has been agreed. You will then declare a 100% of the profit and expenses through the SA800 Partnership Return along with details of the individual partners’ details for the year ended 05/04/19. Please refer to the following links:

BIM 82000


PM11020


Would you be interested in helping us improve the Forum? We are looking for volunteers to spend some time speaking with our research team. If you think you could help us, please click the link below for more information and to register your interest:
https://docs.google.com/forms/d/e/1FAIpQLSc0At8nLG...iuFM1y-A/viewform?usp=sf_link.
We look forward to hearing from you.

[Avatar]

Re:Switching from sole trader to parnership

17/05/2019 09:27:14
Hi again.
Thanks very much for the reply.
So to clarify, when filling in my self assesment on the tailor your return page 1 of 3, to the question: how many self employed businesses did you have, I still declare 1, even though its now a partnership. And the question: In how many partneships were you a partner, I also put 1. (Same question applys to my wife (partner) on her return. 1 self employed business and 1 partnership?

When in section 4. Fill in your return, are you saying I should just declare half of the total business income, and half of the expenses.
So for example if the total business income was £40,000, and the total expenses were £10,000, I should declare £20,000 and £5,000 respectively? And the same for my wife on her return?

Also, in the supplementary partnership pages that appear after I've completed section 4 above, it keeps referring to my partnership statement. Which I assume is the SA800 partnership return you mention. I was told over the phone I would not be able to complete this online and a paper form would be posted. Can you confirm if this is correct. I am still waiting to recieve one several weeks on.
I know it's a lof of questions, but I really would appreciate clarification so much.
Many thanks for your help.
[Avatar]

Re:Switching from sole trader to parnership

17/05/2019 09:27:14
Sorry another question regarding switching from sole trader to partnership.
Do I need to still complete the "self employment" section of the tax return? Or just the partnership section?
Bearing in mind we became a partnership on 06 April 2018?
[Avatar]
  • HMRC Admin 50
  • Joined: 21/06/2017 15:34:03
  • Messages: 1617
  • Offline
  • View profile
  • Send message

Re:Switching from sole trader to parnership

17/05/2019 13:04:32
Hi,

Thanks for your questions.

When you are at the tailor your return section you say no to self-employment as you are no longer a sole trader.

At the section for Partnership you will say yes and declare one. Your wife will do the same. You have to complete the Partnership tax return form, SA800, before you can complete the partnership section in your own return, it can take up to 14 days for post to be received.

I have given a link below for the SA800 for if you wish to download it:

SA800

On this form you show the total income and expenses, then you show how you are splitting the income/expenses between you and your wife and then you show the split details in your own and wife's personal partnership section.

I hope this helps.
[Avatar]

Switching from sole trader to parnership

17/05/2019 13:26:30
Dear Spurs 321

You don't show that you are self-employed any more. You fill in a partnership return SA800, which is not available online. You can download one from the Gov UK site. The partnership return has a partnership split in the last few pages. You show that partnership split in the partnership pages of the personal self assessment form so you are not showing any income and expenses in the personal return-only the partnership return.

Reply