Partners Company accounts

princess

Hi
I was wondering if you could help me. My partner got made redundant last feb so started a partnership with one of the other guys. Since then he has had regular work and been invoicing and keeping receipts but now its that time of year where he needs to submit his accounts....

I have a few of questions.

1) Can he claim the vat back on fuel etc even though he is not vat registered?
2) How would i present this information?
3) How is the tax calculated? Sales - purchases i assume but not sure about this vat thing??
4) What would be the tax rate?

Im sorry to go on but i am really nervous about doing this....its a bit different to college as you are given the questions quite easily!

I would be so grateful for any info anyone could provide me with.

Many thanks

Lucy

burg

I'm afraid that (without offence) some of your questions are quite simple and it may be in your partner and his business partners best interest to seek an accountant.

Sales - expenses = net profit
you then need to adjust to get a taxable profit (add back dep'n less Capital allowances)

If they are not VAT registered then all expenses are for the gross amount (the amount including VAT). i.e. they cannot claim the VAT back but it is part of his costs.

The tax rates for the current tax return (2008/09) would be the 08/09 tax rates. Available from the HMRC website. Profits would need to be split in line with the partnership agreement. Don't forget it's the partner that gets taxed not the partnership.

princess

Hi Ian

Many thanks for your help. I admit my questions do seem to be simple but i am just nervous. I have never done someones accounts before! With college you have a tutor to tell you where you are going wrong but with this, its me and the books!

I do apologise if you feel i lack the experience to do this, i must admit i probably do, having the qualification, doesnt always mean its goin to be easy.

Thanks once again for your help.

Lucy

Bluewednesday

No offence Princess but there's a chance it could cost your husband more if he doesn't get proper advice on this.

Why don't you have a look for an MIP to help you, you can always look at how they've worked things this year to see if it's something you can manage next year.

princess

Hi Blue wednesday

I have since got in touch with an old friend who is a book keeper. She is coming round next week to help.

Since reading both replies i now feel that u both think that i am stupid! Obviously my enthusiam has gone unnoticed!
But i do appreciate your kind words!

I will never ever let my fiance lose money.....!

burg

Lucy,

I do not think you are stupid by any means. Many of us have to learn somewhere and putting theory into practice can be daunting.

Although tax in some circumstances can be fairly simple in other circumstances this is not the case. Having a partnership as opposed to being a sole trader is a step up in complexity.

What myself and Bluewednesday are trying to say is that although you have some theoretical knowledge which may be very good, it is very different performing these services in reality. Not getting the correct advice can be costly, in my opinion the most important years are the first and last. The first as this sets the precedent for the future and the last as there can be many other complications.

I do appreciate your enthusiasm as it is good to see people learning these new skills. My worry is that there will be nobody looking over your work.

I am not too far from you (Gloucester) so if you would like some help setting this going for the first year for you to continue next year then I am willing to try and help.

I would really advise some guidance as this is something you have not performed in practice before.

Best of luck with everything

Bluewednesday

princess wrote: »

Hi Blue wednesday


Since reading both replies i now feel that u both think that i am stupid! Obviously my enthusiam has gone unnoticed!
But i do appreciate your kind words!

Stupid is not what I think at all, I was just trying to help, I completely understand you wanting to try and was just trying to offer some constructive advice as to how you can take it over in the future.