A joint venture is a commercial enterprise undertaken by two or more parties who otherwise retain their separate identities. The parties to the joint venture usually bring together different resources and areas of expertise to help fulfil a specific project or business activity.

HMRC’s manuals make the point that on close examination many of these associations prove to be partnerships, despite the name applied to them. The manuals state that a joint venture, which is not a partnership, is most likely to be found where parties already carrying on businesses of their own agree to co-operate in a single project, but they do not agree to share net profits or losses. Where they do agree to share net profits or losses, it is likely that a partnership will result even where the parties are already engaged in their own businesses.

For a partnership to exist, there must be a business and that business must be a business that is separate and distinct from any other business that the joint venture parties may conduct on their own account.

The cash basis scheme helps many sole traders and other unincorporated businesses to manage their financial affairs. The scheme is not open to limited companies and limited liability partnerships. Using the scheme, allows qualifying businesses to use the cash basis when recording income and expenditure.

You must have a turnover of £150,000 or less to join the scheme and you can continue using the scheme until your turnover reaches £300,000. However, certain small businesses are more suited to using the case basis than others. The scheme is most suitable to relatively modest businesses especially those that provide services.

If you are using the cash basis scheme, then capital expenditure is usually treated as an allowable business expense with the following exceptions:

• The acquisition or disposal of a business or part of a business
• Education or training
• The provision, alteration or disposal of certain non-depreciating assets, assets not acquired or created for continuing use in the trade, land, non-qualifying intangible assets and certain financial assets.

In addition, if you buy a car you can claim the purchase as a Capital Allowance on the condition that the business mileage rate has not been claimed on the car. This is because the rate already contains an element to allow for depreciation.