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Starting Partnership

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  • 25-08-2011 7:34pm
    #1
    Jonny303
    Registered Users Posts: 634 ✭✭✭


    Hi,

    Looking for some advise.

    Myself and my other half will be taking over the salon she is currently running at the moment. It is currently part of another business so technically we are not taking over the business, rather starting afresh.

    Herself will be working in the busines with two others. Can she be paid under PAYE rather than being self employed? I am PAYE with another business, I don't intend to take a wage from the company, but being part of the business, am I liable to tax from it? (ie. can profits be retained in the business rather than claimed by either of us as a wage)

    Cheers for any help


Comments

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    #2
    MBateson
    Registered Users Posts: 169 ✭✭MBateson


    Sounds like you are taking over a business, even if it is only part of an existing one.

    If you're not setting up a company to run the business, then you must register as self employed. You can reg as a partnership or she can just reg as an individual.

    If self employed, the profits are taxed whether you leave them in the business or not.

    If a company, you are taxed on your salary as PAYE, what's left is taxed at 12.5% a comparatively low rate.

    There are other pros and cons to each option, you should meet with an accountant to go through them.


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    #3
    TheCostumeShop.ie: Ronan
    Company Representative Posts: 1,740 ✭✭✭TheCostumeShop.ie: Ronan


    It's probably better to form a company rather than go down the sole trader route, limited liability would be very worth while for a salon.

    As a company then her income can be PAYE and / or dividends.

    Also by winding down the other business and opening a new company you are no longer liable for the trading past of the previous owner, otherwise an outstanding lawsuit / bill could land on your doorstep. So definitely talk to your accountant before making decisions of this nature.


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