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PARTNERSHIPS

A partnership is a business where two or more people share control, finances and responsibility. The advantages and disadvantages of this type of business structure are as follows:

Advantages:

Capital; the partners will fund the business with start-up capital. The more partners there are, the more money can be put in to the business, allowing better flexibility and more potential for growth.

Establishment; partnerships are relatively easy to establish. It is sometimes wise to draft a partnership agreement in order to avoid any future problems.

Responsibility; partners share responsibilities in the running of the business. This enables them to take advantage of their abilities. They may wish to divide labour based on their individual skills.

Decision making; partners share the decision making and can help each other out when need be. With more than one person, brains can be picked when it comes to idea generation and problem solving.

Disadvantages:

Disagreements; probably the main disadvantage and one that can cause the most problems. Different partners will have different ideas on how they think the business should be run. This can lead to disputes which can harm the business and also the relationships within it.

Liability; partners are liable for the actions of other partners. Partnerships are also subject to unlimited liability; the partners share the financial risks of the business. This point can be off- putting for some people. It can be countered by the formation of a limited liability partnership, which benefits from the limited liability granted to limited companies while still taking advantage of the flexibility of the partnership model.

Tax Compute can offer advice on whether this would be a suitable structure for you.

Partnerships

TAX RETURNS

We carry out an analytical review and quality checks before submitting your tax return. We ensure compliance and timely submission.

MANAGEMENT ACCOUNTS

Management accounting is a profession that involves partnering in management decision making, devising planning and performance management systems and providing expertise in financial reporting and control to assist management in the formulation and implementation of an organization's strategy.

VAT RETURN

The VAT return shows the calculation of the amount of VAT due on sales minus the amount of VAT reclaimable on purchases. The result is the amount payable to HMRC.

BOOK KEEPING

Bookkeeping is the recording of financial transactions, and is part of the process of accounting in business. Transactions include purchases, sales, receipts, and payments by an individual person or an organization/corporation

PAYROLL

Within a company, payroll is the combination of all of the financial records of their employees' salaries, wages, bonuses and deductions. In accounting, the term payroll signifies the amount that has been paid out to employees for the services they have done for the organization within a certain period of time

CORPORATION TAX

Corporation tax is a tax placed on the taxable profits of limited companies and other organisations such as clubs, societies, associations, and unincorporated entities.

COMPANY FORMATION & BUSINESS START-UP

You can register online with Companies House if your company is limited by shares and uses standard articles of association (known as 'model articles'). Otherwise, you must use a different method of registration. Your company will also need to register for Corporation Tax within 3 months of starting to do business

CONTRACTORS & FREELANCERS

Working outside the scope of IR35 and knowing what is claimable are the two most important issues when freelancing or contracting.