Business partnerships can be formed between two or more people and can be extremely rewarding. Partners are not only accountable for general business operations but for finances too. Each partner in the firm is joint and severally liable for any debts that the business has. Profits are shared between each partner based on agreed percentages when the partnership was established.
If you are one of the members in the partnership, and you are self-employed, you will have to complete and submit an annual self-assessment. Before you can complete the tax return profits must be calculated and divided up between each partner.
These calculations must be accurate but they can be quite complicated so it is recommended that partners use an accountant. Finance professionals will ensure that individual and partnership tax returns are complete and accurate when they are submitted. They will also make sure that allowances which are available are claimed, which will in turn, reduce the tax that the partner is liable for. Paper completed self-assessment tax returns have to be completed by 31st October and by 31st January if they are submitted online.
Accountants can help partnerships in a number of ways;
A business partnership can be relatively simple to create provided that a suitable agreement is reached by all parties to avoid any disputes in the future. As there are multiple owners managing the business it is sometimes easier to raise funds for investment or growth. Businesses with partnerships can receive multiple benefits associated with the knowledge base of more than one manager.
While there are distinct advantages, an accountant can also advise you of the pitfalls before you enter into an agreement. When there is a partnership, all partners are liable for the actions of others. Disagreements can sometimes occur because decisions have to be agreed by all parties before an action can be implemented, which can result in longer timescales to make decisions.
It would be unwise to manage a partnership without a good accountant. The Accountancy Network website can help you find the right accountant for your partnership.