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Where Taxpayers and Advisers Meet

Two Sole Traders sharing a shop

crystalfairy13
Posts:1
Joined:Wed Mar 01, 2017 4:56 pm
Two Sole Traders sharing a shop

Postby crystalfairy13 » Wed Mar 01, 2017 4:59 pm

Hi
Myself and another independent sole trader are looking at taking on a shop between us in order to share both the financial and time costs. We have both been self employed for some time making and selling handcrafted items and we do not wish to start a partnership if possible.
We will split all costs of the premises rent, insurance etc.. 50/50.
We will each keep our own income for goods sold and fill in our separate tax returns as usual.
We want to establish that this is possible and that we will not be treated as one retail business and as such be subject to the VAT threshold for one combined business income. Ideally we wish to have individual VAT thresholds as we are completely separate businesses.
We will have to set up a holding bank account facility for taking card payments as customers may wish to purchase items from both of us in one transaction, and it would be awkward to make them pay separately. Funds from this account will then be transferred accordingly to our own accounts.
Any advice on how we go about this would be most appreciated :?

les35
Posts:635
Joined:Wed Aug 06, 2008 3:09 pm

Re: Two Sole Traders sharing a shop

Postby les35 » Thu Mar 02, 2017 10:03 am

If the goods you are selling are similar, you will be more vulnerable to HMRC action. If your goods are distinct, then you will be safer.
Make sure you have seperate rent contracts, insurance policies, bank accounts. Have a written agreement between the two of you, especially if you are sharing merchant services.
Make sure the customer is clear that there are two businesses in the one premises. Different trading names, with distinct letterheads, seperate websites, facebook pages, etc. And evidence all of this.
And, have your Accountant(s) work through the disaggregation guidance with you.

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: Two Sole Traders sharing a shop

Postby bd6759 » Thu Mar 02, 2017 5:33 pm

TBH I don't see too much of problem. What you have described is a joint venture, where each party retains their own income and meets theur own share of the expenses. It is a fairly common business arrangment and should not cause any problems.


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