VAT claims on Expenditure not relating to partnership

[theonethatgotout]

Hi,

Need some advice please...

If two business partners use different trading bank accounts for a business partnership.

Partner A - has full up to date accounts for trading, all income & outgoings.

Partner B - Full up to date accounts for outgoings, has shown no income for months. Outgoings may not entirely be for the benefit of the partnership, well relate to costs for another family member’s venture. Who is not involved in the partnership. Partner refuses to even acknowledge the query on the expenditure over years! So basically partnership used for own gain/benefit outside of it.

Yes it’s all a mess! Solicitors letters back & forth. Months & months of waiting for responses. False allegations of all sorts by B against A and their family. B not open to any negotiations, just their way or no way. No partnership agreement sadly.

This is taking its toll on family members. Seems to be going around in circles with only solicitors benefitting.

Accountant is not helpful, friendly with B. Partner A uses another accountant for another separate business, so accountant not happy about that. Partner B has told accountant that Partner A shouldn’t see accounts relating to his trading as it has got nothing to do with him.

 

[chipchap]

Sounds like the best way forward is to wind up the partnership.
somebody wiser than me once said “ The very second trust is lost between partners the partnership is no longer a partnership”

 

[theonethatgotout]

That is the aim of Partner A, has tried to propose a divide of assets & liabilities fairly. But no negotiating with Partner B. Hasn’t even bought an offer to the table!

So if partner B is putting expenditure through partnership accounts/books, No Sales/Income. But selling livestock that received that expenditure (feed etc). That are apparently his son’s livestock or his own personal livestock, kept on partnership owned land. Under his son’s name. Where does that stand legally!?

 

[chipchap]

Wind it up and move on.
life is short enough.

 

[Dealer]

Declare costs of partner B as Drawings from partnership he will be liable for tax or declare it as theft as unauthorised withdrawal of assets, and use it to wind up partnership.

have partnership valued on an asset basis by independent agent split partnership less the value of partner B has taken for other activates.

 

[Exfarmer]

Long time since I was in partnership with anyone but wife, but I thought partners were fully liable to each other, may be wrong

 

[Frank-the-Wool]

Remember you are "equally and severally liable"!
Any debts on the other side you will be liable for.

 

[betweenthelines]

If you have a Partnership Agreement, it will cover dissolution.

If you don't have a PA, you are:

a) an idiot
b) in the shyte

 

[betweenthelines]

Your OP also seems to indicate you & your partner have two sets of Accounts. A Partnership can only have one set of Accounts.

 

[Johnnyboxer]

If you have a Partnership Agreement, it will cover dissolution.

If you don't have a PA, you are:

a) an idiot
b) in the shyte

He said there wasn’t a partnership agreement

 

[betweenthelines]

He said there wasn’t a partnership agreement

Sell the assets and feck off with the money

 

[flowerpot]

If you don't have a partnership agreement, the standard partnership law takes over - but I'm not sure what is says exactly. Any solicitor and accountant should know that.

 

[Clive]

Hi,

Need some advice please...

If two business partners use different trading bank accounts for a business partnership.

Partner A - has full up to date accounts for trading, all income & outgoings.

Partner B - Full up to date accounts for outgoings, has shown no income for months. Outgoings may not entirely be for the benefit of the partnership, well relate to costs for another family member’s venture. Who is not involved in the partnership. Partner refuses to even acknowledge the query on the expenditure over years! So basically partnership used for own gain/benefit outside of it.

Yes it’s all a mess! Solicitors letters back & forth. Months & months of waiting for responses. False allegations of all sorts by B against A and their family. B not open to any negotiations, just their way or no way. No partnership agreement sadly.

This is taking its toll on family members. Seems to be going around in circles with only solicitors benefitting.

Accountant is not helpful, friendly with B. Partner A uses another accountant for another separate business, so accountant not happy about that. Partner B has told accountant that Partner A shouldn’t see accounts relating to his trading as it has got nothing to do with him.

The partnership is over if trust is gone

Partner B is breaking the law and committing fraud - no need for solicitors. tell them to sort their shite out ASAP or you will let HMRC know ?

You can never remain in a partnership with someone you don't trust 100% - remember YOU are equally responsible for their debts with no limit on that liability! if you need to remain in business with partner B then form a Ltd ........ fast !

 

[betweenthelines]

If you don't have a partnership agreement, the standard partnership law takes over - but I'm not sure what is says exactly. Any solicitor and accountant should know that.

Partner B will deny there was ever a formal partnership

It happened to me

Partner was my brother

 

[Courier]

Long time since I was in partnership with anyone but wife, but I thought partners were fully liable to each other, may be wrong

I would say that you are Spot On ... And if two or more folk are trading as though a Partnership then that is how the Law should teat your assets, income and expenditure - Shouldn't have two sets of accounts for one partnership though ....

 

[Bongodog]

You should have one set of accounts for the partnership which has to submit a tax return and then individual tax returns for each partner that include both their share from the partnership plus individual earnings. It looks like you don't have a partnership according to hmrc, what you actually have is two people trading from the same address and sharing expenses.

 

[Goweresque]

You should have one set of accounts for the partnership which has to submit a tax return and then individual tax returns for each partner that include both their share from the partnership plus individual earnings. It looks like you don't have a partnership according to hmrc, what you actually have is two people trading from the same address and sharing expenses.

I'm guessing that when the OP says 'accounts' he means bank records of the money in and out of each bank account. Not a formal set of financial accounts drawn up by an accountant. Thus one 'partner' is drawing money out of his or her partnership account in ''business expenses' but not putting anything in from sales. Which does beg the question that surely they'd run out of cash quite soon if that was the case?