Hi Everyone,
I am new here and looking for some advice please.
I am currently employed earning approx. £40k and also a self-employed sole trader and profits have been around £20k for each of the last three years. My partner (not married) earns around £27k employed and does some light admin work for me.
I’m thinking about forming a partnership with her and giving her say 25%. That way approx. £5k will move over to her, she will pay 20% tax instead of my 40% tax, she won’t pay any class 4 NI instead of my 9% and we will also get to keep some of our child benefit as I’ll be under £60k..
Does this sound ok? Do you think HMRC would be ok with it or would they expect her to be treated as an employee? Also I gather doing it this way would mean three returns each year, one for me, one for her and one for the partnership. I have hardly any expenses or anything complicated so I do my own tax returns – would that still be possible with a partnership?
Finally I currently just have a personal account for my self employed business, would I still be ok to keep using that or would they expect me to open a joint business account? If I can use my existing account would I be expected to physically transfer 25% of the profits over to her account to show an audit trail?
Many thanks in advance to anyone who responds.
Cheers
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