Business

sole traders

can two people who are both sole traders work tohether under one name and pay their own taxes instead of setting up a limited business tohether and paying extra taxes?
cheers

cleo1 Tue 18/03/08 19:59

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phl666
Tue 18/03/08
22:27

Yes. But you will have to sort out your accounts and banking etc. individually. The single name which you trade under is just an "umbrella" name and has no legal significance.

Tom Braider
Fri 21/03/08
23:17

I don't think phl is right. The joint business will be a partnership, surely? It will submit joint accounts, etc and there may be other legal consequences. The tax bill will be split, though. Anyway, what extra taxes would be payable if a limited company was formed? If you do it properly it could be advantageous.

cleo1
Tue 25/03/08
08:46

Question Author

i think it is a lot cheaper if two people pay their own national insurance and taxes but is it legal?

hev
Tue 06/05/08
16:51

Yes just register with the revenue as a partnership. You can do it over the phone as long as you have each others tax references. You will still be required to complete individual tax returns each with a partnership page to show the split of the profit. You will also be required to complete an annual partnership return showing the whole business turnover and expenses you are still liable for your own tax and NI. If you formed a LTD company you would be paid as directors through the company not as easy to do yourself you may find you need an accountant.

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