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HM Accountax Ltd
HM Accountax Ltd, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 181
Experience:  I am an accountancy professional with more than10 years hand on experience in audit, accountancy and tax affairs.
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I’m looking to set up a small business but unsure if it

Customer Question

Hi I’m looking to set up a small business but unsure if it should be a partnership or a limited parternship. What’s the best way to go?
JA: Have you talked to a tax professional about this?
Customer: Not yet
JA: Anything else you want the Accountant to know before I connect you?
Customer: no
Submitted: 13 days ago.
Category: Tax
Expert:  HM Accountax Ltd replied 13 days ago.

Hi,

I am an advisor at Just Answer and i am happy to assist you.

Could you please kindly provide me more details about your business like expected turnover, number of partners, trade you are going to start etc.

Regards

HM Accountax

Customer: replied 13 days ago.
Hi, expected turnover is £20k. Partners are 2 potentially 4 (2 of the partners are currently close to the high tax bracket and don’t wish to go into this). Trade is a campervan hire business.
Customer: replied 13 days ago.
If the partners wish to draw down a regular salary- is this better to go limited company?
Expert:  HM Accountax Ltd replied 13 days ago.

Hi,

Thanks for your prompt reply.

The main difference between partnership and LLP is that ordinary partnership is not separate legal entity while LLP is therefore, liability is limited of partners in LLP. In both forms, partners are taxed in their share of profits.

Based on your explanation about 2 partners going into higher rate tax bracket, i'll suggest that you consider Limited company as it will be better structure. you can setup different classes of shares so that the shareholders (partners) will get different dividends etc.

If you have any further queries then please feel free to contact me.

Regards

HM Accountax

Customer: replied 13 days ago.
the shareholders receive a dividend which is taxable. Can they also receive a salary?
Expert:  HM Accountax Ltd replied 13 days ago.

Yes, they can also receive a salary.