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  • FIRST POST
    • dm999
    • By dm999 3rd Jan 17, 4:46 PM
    • 22Posts
    • 4Thanks
    dm999
    Self Assessment and Partnership tax return questions
    • #1
    • 3rd Jan 17, 4:46 PM
    Self Assessment and Partnership tax return questions 3rd Jan 17 at 4:46 PM
    Hello all, Happy New Year

    I'm after some advice regarding tax returns, I've completed them online in the past so have a little experience there both as an employee and as self-employed.

    My situation is different now, in the 2015/16 tax year I started a business with my Wife, we set it up as a Partnership and I understand that we need to submit a tax return each as individuals and one for the Partnership.

    My questions are:

    1) To start the business we loaned it some capital from our personal savings. How do we reflect this loan in our tax returns and will these details need to be entered in both the personal and Partnership returns?

    2) The above loan was not repaid until the following tax year (2016/17), how will I be able to carry this outstanding debt forward to the 2016/17 tax return?

    3) I understand that we need to submit the Partnership tax return using software approved by HMRC as detailed on their website as linkned from this page - https://www.gov.uk/software-tax-returns

    Our tax returns are not complex and so I don't wish to over complicate. or indeed overspend on unnecessary software. Does anyone have any experience or recommendations for which software to use?

    4) We're thinking that the "Cash Basis" - https://www.gov.uk/simpler-income-tax-cash-basis would be the best way forward for our simplistic needs. Any thoughts?

    5) We inherited a van that we use for business only, it's value is negligible but it's clearly invaluable to the business. Any thoughts on including this in the return?

    Any help would be much appreciated.

    Thanks, DM.
Page 1
    • purdyoaten2
    • By purdyoaten2 3rd Jan 17, 6:26 PM
    • 584 Posts
    • 257 Thanks
    purdyoaten2
    • #2
    • 3rd Jan 17, 6:26 PM
    • #2
    • 3rd Jan 17, 6:26 PM
    Not sure where to start here. I have specialised in partnership taxation for 35 years and, on the basis of your questions, would recommend seeking advice, at least in the first year. The partnership return should detail the accounts of the partnership - have any been prepared?

    For example, points 1 and 2 - unless there is interest charged on the 'loans' they do not figure on the partnership returns and definitely not on your personal returns. The loan could appear on the balance sheet of course but it is more likely to take the form of cash introduced. However, if no balance sheet and no interest - then no entries required.

    Don't mess about with this - a wrong partnership return leads to three wrong returns in total.
    purdyoaten lost his password
    • dm999
    • By dm999 5th Jan 17, 4:23 PM
    • 22 Posts
    • 4 Thanks
    dm999
    • #3
    • 5th Jan 17, 4:23 PM
    • #3
    • 5th Jan 17, 4:23 PM
    Not sure where to start here. I have specialised in partnership taxation for 35 years and, on the basis of your questions, would recommend seeking advice, at least in the first year. The partnership return should detail the accounts of the partnership - have any been prepared?

    For example, points 1 and 2 - unless there is interest charged on the 'loans' they do not figure on the partnership returns and definitely not on your personal returns. The loan could appear on the balance sheet of course but it is more likely to take the form of cash introduced. However, if no balance sheet and no interest - then no entries required.

    Don't mess about with this - a wrong partnership return leads to three wrong returns in total.
    Originally posted by purdyoaten2
    There is no interest on the loans and the partnership repaid them to us wholly in the 2017/18 tax year.

    As for accounts, all income and expenditure figures are currently in excel. I assume that I will need to input these details into the 'recommended software' to submit the return?

    As the trading period in 2015/16 was less than 3 months and we were a new startup and business was slow to start the tax returns will essentially be nil in all 3 cases. I suspect there will be NI to pay though.

    Our business is strictly small, part-time and seasonal which really prohibits us paying for advice.

    Any advice on which software to use for the Partnership return as per my original post would be great.

    Thank you.
    • MichelleUK
    • By MichelleUK 5th Jan 17, 4:55 PM
    • 280 Posts
    • 172 Thanks
    MichelleUK
    • #4
    • 5th Jan 17, 4:55 PM
    • #4
    • 5th Jan 17, 4:55 PM
    Our business is strictly small, part-time and seasonal which really prohibits us paying for advice.
    Originally posted by dm999
    I think that purdeyoaten2 was politely saying that the nature of the questions that you have asked shows that you are not really able to complete the accounts and tax return without an accountant's help. You could cobble some answers together here, but you need someone to look at the whole picture to give you good advice.

    Many people start off a small business, think accountants are too expensive, and plod on without any help. The trouble with this is, once mistakes and decisions have been made (and there will be many) it gets very expensive to pay for them to be corrected later.

    Why not see an accountant to get you started, and then once you have seen how they should be completed, then decide if you feel able to take them over in the future? Often the decision not to pay an accountant will cost you more in the long run in overpaid tax and missed savings.
    • Pennywise
    • By Pennywise 5th Jan 17, 7:34 PM
    • 8,955 Posts
    • 16,129 Thanks
    Pennywise
    • #5
    • 5th Jan 17, 7:34 PM
    • #5
    • 5th Jan 17, 7:34 PM
    For software, I'd recommend taxfiler.

    Re the vehicle, you should introduce it at it's open market value and then claim capital allowances on it, adjusted for private use. Or if you want the easier method, just claim 45p per business mile and ignore it's value and running costs.
    • dm999
    • By dm999 15th May 17, 10:17 AM
    • 22 Posts
    • 4 Thanks
    dm999
    • #6
    • 15th May 17, 10:17 AM
    • #6
    • 15th May 17, 10:17 AM
    Thanks again Pennywise, I used Taxfiler back in January and am about to use it again to submit my 2016/17 returns. Nice and simple to use and only £30 for a Partnership.
    • pafpcg
    • By pafpcg 16th May 17, 11:30 AM
    • 141 Posts
    • 94 Thanks
    pafpcg
    • #7
    • 16th May 17, 11:30 AM
    Partnership tax returns
    • #7
    • 16th May 17, 11:30 AM
    3) I understand that we need to submit the Partnership tax return using software approved by HMRC
    Originally posted by dm999
    You can submit Partnership Tax Returns (SA800) in paper form - just download the blank PDF from HMRC, print it out and fill-in the boxes - no need for software!
    • dm999
    • By dm999 18th May 17, 8:19 PM
    • 22 Posts
    • 4 Thanks
    dm999
    • #8
    • 18th May 17, 8:19 PM
    • #8
    • 18th May 17, 8:19 PM
    You can submit Partnership Tax Returns (SA800) in paper form - just download the blank PDF from HMRC, print it out and fill-in the boxes - no need for software!
    Originally posted by pafpcg
    Good point, I was too late last year for paper submission but I've got plenty of time this year
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