don't know if this is going to make sense I know what I'm trying to say but not sure if I can get it to come across properly

I had a small business with a friend that didn't do particularly well - we sold party supplies

we ended the business in March this year but still had stock left so we've split it 50 / 50 to do what we want with

I now have a small business making handmade cards which is slowly growing and doing quite well

I try and sell cards on here ( haven't sold that many ) but I have an account on e.bay just for my cards and thought I could try and get rid of some of the party stock through that ID as well

but when I come to do my accounts I have to put the price down that I paid for the stock but my card business didn't pay for it the party one did so what do I do ????

hope that makes sense , if not just ask any questions that might make it easier to understand

Hi Dunne

Will you and your friend be sending a form off to the IR for the party business ?

Then you will be sending in seperate accounts for the card business ?,is this where the confusion is,so you dont want to declare the costs twice.

yes we'll be sending in our final tax return for the party business this year plus the first one for the cards business as I started that up in April last year

in effect the party business has paid for the party stock not the card business

why is this sooooooooooooo confusing lol

All you can really do is add the cost of the sales as you would if it was a card product,IR are usually just interested in year end totalls not what the stock was.

Just remember to keep all paperwork from both business if they do query it but i doubt if they would notice and a stock difference wouldnt make any difference.

While I'm not familiar with UK tax laws, I would think that the inventory from the defunct partnership should be treated as owners equity in your new venture.  I'm assuming that the stock was yours unencumbered at the time you opened the new business.  If that is the case, then the value of the goods is part of your capital investment just like cash or other assets.  I would also think that the value of the goods would be the valuation placed on them at the time you acquired sole right of ownership to them.  Or simply put, what they were worth at the time you closed the first business. 

If it were me, I would consult with my accountant or tax adviser.

Dennis

I agree with Jabek.  We call it "capital" in the UK.  Your capital is the amount (stock or money) that you put into your business.  As long as you have accounted for your stock in your previous accounts, you now own it, and the value of the stock can be taken out of the business by you, without paying tax on it.

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