employee of own partnership business

Allie Registered Posts: 6 Regular contributor ⭐ 😼 ⭐

This many sound a bit of strange one but is it ok to be an employee of your own self-employed partnership. One of my clients is currently being paid as an employee (ie tax & nics taken at souce) of her business which is a partnership of 2 - my client & her husband. Or should she just be self employed and complete a self assessment with her share of the profit from the business.

Any suggestions/reasonings etc will be gratefully appreciated


  • JodieR
    JodieR Registered Posts: 1,002
    wrong wrong wrong! if she's a partner then she'll be taxed on a percentage of the partnership profits. The partnership will complete a partnership return which apportions the profits and then her share will be shown on the partnership pages of her tax return. She shouldn't be an employee at all.
  • Allie
    Allie Registered Posts: 6 Regular contributor ⭐ 😼 ⭐
    Many thanks Jodie I thought this was the case but sometimes you just need to talk or in this case 'write' to someone for re-assurance
  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 🎆 🐘 🎆
    Another vote for wrong wrong wrong!!
    If she is an employee, she is not a partner. If she is a partner, she is not an employee.

    At a wild guess, it's more tax efficient for her to be a partner than an employee but it all (f course) depends on the numbers :)
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