Any accountants/finance people about? Really need business help!

Something I forgot to mention, I'm trying to work this in the best way possible so that our tax liability is as little as possible!

I really would recommend you see an accountant. However, you can transfer your assets (equipment) into the partnership, where it will be treated as an addition, and you can therefore claim capital allowances. What this means is that when your profits are calculated, instead of reducing them by the amount depreciated on your equipment, you can actually claim 100% in the first year as an annual investment allowance (AIA), but then you will have written off all your equipment in one year, so there will be no writing down allowances in subsequent years (unless you invest in more equipment).

I can't recommend an accountant enough, especially as you're going into partnership with an outside party. You'll get very good advice - just because you're studying ACCA, it's hard to have the day to day knowledge of ways to reduce your tax bill that an accountant who deals with this day in day out will. For example, depending on your projections, it may well make sense to form a company, and pay yourself dividends and basic salary - this would mean no income tax, and only 10% tax on your dividends, but the company taxed at 21% (which is obviously more desirable than if you're a 40% tax payer). There are lots of variables - speak to someone who knows it like the back of their hand.

Why are you setting up an LLP instead of a limited company? I would talk to someone about this before you go down this route, as it is mainly suited to professionaly partnerships, like solicitors

You should invoice the company for your assets, the other side of this will go to a loan account

Capital allowances will be available on these

Thank you Carrie and Ice Queen, and sorry for not replying sooner.

We didn't want to set up just a partnership because of being liable for each other's debts, but I'm uncertain about setting up a limited company because of the extra paperwork involved. It am aware that LLPs are more suited to accountants and solicitors, but I guess this is what I need advice on.

I've looked for accountants near by and there seems to be some good ones, so hopefully I'll get the answers I need.

Thanks for making me see sense!

Julia. I seem to remember you are in the Milton Keynes area? If so, I can recommend some accountants that may be able to help you.

In my experience every client who originally thought an LLP was a good idea has now converted to a limited company. Yes there is more work, but ultimately there is more flexibility in terms of tax planning

In a partnership all profits are taxable by the partners, whereas in a Ltd company you can choose what you extract, and whilst all profits are taxable corporation tax rates are lower, and dividends are not taxable unless your income exceeds higher rate tax

Email me if you want *****@*****.**.**

I agree with Ice Queen. The only reason solicitors and accountants use LLPs is that they're not allowed to operate as limited companies; a company structure is much more flexible and, TBH, there's not that much extra admin compared to an LLP.

Redbedhead, yes I am, we've met once! It turns out that my friend has a family friend who is a partner in a big accounting firm based in Leighton Buzzard, so I think we might be trying him first. She'd never mentioned him before as she didn't think that we would need him!

Thank you, Ice Queen and Knownowt, again, you all make sense and I will definitely be seeking advice rather than trying to muddle through on my own.