Starting a business

[cocopops]

Hi All.

A friend and myself wish to start up a business as therapists, but she does not wish to register for paying tax. I intend to register but wonder what the implications may be if we stil work together, ie , will I be her employer and can she still work alongside me as a sole trader etc..

help, please

[Hawkwalk]

she has to pay tax one way or the other so no avoiding it unless you and she wants to break the law. You should ask why she does not want to pay tax and i would avoid going into business or employing anyone who wished to avoid paying tax. They will catch you in the end.

[buildersmate]

If you set up a partnership, you are each legally responsible for your own tax offers - you are both self-employed. So that arrangement wouldn't directly impact you, in terms of her relationship with HMRC.
However it would be wise to ask yourself if you really want to enter into a partnership with someone who openly says to you they intend to operate in this way.
If and when she eventually gets found out, it could impact you in terms of her willingness or ability to continue in business with you.

[Whoever]

I'd ask myself very seriously if I wanted to go into business with somebody who was prepared to break the law and not pay tax. If she's prepared to be dishonest in that respect, what guarantee have you that she wouldn't also be prepared to cheat on you financially if the need or opportunity arose? If you're planning to keep any joint accounts, then you will both be equally responsible for payments. If you're just working together but each responsible for taking payments from your separate individual clients, then your tax arrangements will be separate, but you're still putting yourself in a vulnerable position being in business with somebody who you know is breaking the law.

[twix123]

Other than the fact that I wouldn't want to work with someone who seems to have a 'bent' for dishonesty, if she doesn't register as Self Employed within 3 months of starting to work for herself she will be liable for a minimum penalty of £100 from HMRC.

Should you be her employer, you will be obliged to to deduct Income Tax and National Insurance from any wages you pay her, otherwise you also would be liable for penalties.

[cocopops]

Thank you all for your advice. Its definitely given me something to consider and also reconsider going into business with her.

I will have a serious chat with her one last time in relation to her becoming registered and will base my decision on her response whether or not to go ahead with it.

Thanks again!