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Me and my business partner are both sole traders and have run a tattoo studio for 7 years together. Recently (October time) we learned about the VAT threshold and that we would have to form a partnership, as last December we went over this threshold. So instead of doing this we’ve decided to split up (not on bad terms by any means) he is leaving to work elsewhere and I am keeping the studio so we can both earn money without getting charged VAT.
This is because we can’t charge VAT to our clients like most self employed people can, we have to absorb it and it will eat into my earnings far too much.
We have come forward to HMRC and our accountants and are 100% being above board and transparent with this matter.
Within the next couple of months I will receive the VAT bill for the time that my business partner and I worked together at our tattoo studio obviously it’s not fair for me to pay the whole bill as he is responsible for 50% of it’s amount. Even though he’s left and will no longer be affiliated with the business. He has happily said he’ll pay 50% as he is a good guy and knows that he is responsible for 50% of the total amount whatever it ends up being. (Rough calculations show it could be around £15,000 each) in addition he has even said he will sign a contract to state that he will do so for my peace of mind.
my concern is that I’m not 100% sure if he has a legal responsibility to pay the bill since he’s leaving and I’m worried that if we don’t get anything put in writing that he may be able to just say “no I’m not paying” and I won’t have a leg to stand on. Is there a template for this as I’m really stuck on how to begin writing it up and I don’t have the money to go to a solicitor because of having to put so much towards this imminent VAT bill. Someone help please! Thank you in advance
This is because we can’t charge VAT to our clients like most self employed people can, we have to absorb it and it will eat into my earnings far too much.
We have come forward to HMRC and our accountants and are 100% being above board and transparent with this matter.
Within the next couple of months I will receive the VAT bill for the time that my business partner and I worked together at our tattoo studio obviously it’s not fair for me to pay the whole bill as he is responsible for 50% of it’s amount. Even though he’s left and will no longer be affiliated with the business. He has happily said he’ll pay 50% as he is a good guy and knows that he is responsible for 50% of the total amount whatever it ends up being. (Rough calculations show it could be around £15,000 each) in addition he has even said he will sign a contract to state that he will do so for my peace of mind.
my concern is that I’m not 100% sure if he has a legal responsibility to pay the bill since he’s leaving and I’m worried that if we don’t get anything put in writing that he may be able to just say “no I’m not paying” and I won’t have a leg to stand on. Is there a template for this as I’m really stuck on how to begin writing it up and I don’t have the money to go to a solicitor because of having to put so much towards this imminent VAT bill. Someone help please! Thank you in advance
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