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Posted Tue, 05 Mar 2024 18:54:38 GMT by rozzmozz
My wife and I undertake a small amount of freelance work together, amounting to around £1,500 turnover per year. We are set up as a partnership where we each declare £750 a year, which is taxed fully as partnerships are not eligible for the trading allowance. Instead of using a partnership, would I be able to hire my wife as a sub-contractor on our projects, leaving us to individually declare the income as a sole trader? If yes, would I still be able to claim the trading allowance? How would I declare paying my wife on my tax return? Thank you
Posted Wed, 06 Mar 2024 11:12:39 GMT by HMRC Admin 20
Hi rozzmozz,
Not as a subcontractor.
You would need to dissolve the partnership to then each register as a sole trader.
Thank you.
Posted Wed, 06 Mar 2024 11:30:44 GMT by rozzmozz
Thank you for your reply. If we were to dissolve the partnership, would we still be able to work projects together where we send one invoice to the client then split the earnings?
Posted Thu, 07 Mar 2024 12:02:17 GMT by HMRC Admin 20
Hi rozzmozz,
No this would still be seen as partnership income.
Thank you.

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