Self employment return or partnership return?

infoleacher

Hi,

I'll try to be brief:

I run a small business with my wife, we are about to submit our 2009 - 2010 tax return via our bookkeeper. We only recently registered as a partnership and dated it with effect from 01/05/2009 (its a long story why, but lets just say its a mix of mis-information and naivety on our part) The previous year, we had submitted our tax return as individual self employed tax returns having split the profits etc exactly by 50%. So we were taxed correctly and are up to date with our tax payments. Our new bookkeeper advised us that we were doing it wrong and that it should be completed as a Partnership return, the only problem being that this all happened too late for us to get the UTR for the partnership through in time.

I want to pay my tax, I always have done and I always intend to. But it would appear that I will now be fined for late filling of a partnership tax return, despite the fact that as far as I can tell, when we submitted a self employment tax returns for the 2008 - 2009 tax year there were no detrimental consequences.

What I need to know is that would it be ok to submit our tax returns as individuals again this time, given that we are not trying to "get out" of paying our tax, or is it breaking some law? I don't really want people to tell me what I "should" have done as I now realise that we made a mistake, but I want to know if as I will pay the same tax anyway, will the HMRC accept individual returns?

Hope you've followed, and thanks for reading.

ncthomas1

if you have been issued with a partnership UTR by HMRC, then you must submit a partnership return. Dont forget, you STILL need to file individual SA returns AS WELL for each partner. Filing deadline was only 31st Oct for Paper returns, so if you do it online NOW that is fine.
However, the problem you may get now is that the bookkeeper may not have partnership return software - you cant use HMRC online for it as they dont give you the software.
Grab ANDICA for around £10/ £15 for one return, and you will be able to do it, AND avoid the £200 fine
(£100 each individual partner)
If you are stuck shout.
Also, as a HMRC authorised agent, I got an agent alert yesterday about late receipt of partnership returns, and if you have a reasonable excuse, then you can avoid the fine. Check out the HMRC website, type in late partnership return and you will be able to see what forms you need to fill in

infoleacher

ncthomas1 wrote: »

if you have been issued with a partnership UTR by HMRC, then you must submit a partnership return. Dont forget, you STILL need to file individual SA returns AS WELL for each partner. Filing deadline was only 31st Oct for Paper returns, so if you do it online NOW that is fine.
However, the problem you may get now is that the bookkeeper may not have partnership return software - you cant use HMRC online for it as they dont give you the software.
Grab ANDICA for around £10/ £15 for one return, and you will be able to do it, AND avoid the £200 fine
(£100 each individual partner)
If you are stuck shout.
Also, as a HMRC authorised agent, I got an agent alert yesterday about late receipt of partnership returns, and if you have a reasonable excuse, then you can avoid the fine. Check out the HMRC website, type in late partnership return and you will be able to see what forms you need to fill in

Hi, thanks so much for your response. The problem is that we only sent off the registration to HMRC a fortnight ago and we have not yet received the UTR for the partnership. So you can see my problem, I want to tell Mr Osbourne what I'm going to pay him & pay it, but I cant because they haven't issued the UTR yet. But I do accept that I should have requested it earlier (like I say misinformation & naivety) It seems so unfair that my tax obligation will be the same as an individual or a partnership, but will HMRC fine me if I use the wrong kind of return. Or will they fine me if I wait for my UTR to arrive? It seems a little like devil & deep blue sea to me.

jimmo

At this very late stage the most important thing is to get the tax paid by Monday.
Do your individual Returns now and, in many ways, it does not matter whether you declare yourselves to be self-employed or your individual shares of the partnership profits as long as you pay the tax on time.
If you fail to pay up on time the penalties will be a percentage of any late paid tax.
You can always amend your individual Returns later when the partnership Return is completed.
The penalties procedures have changed a lot since I retired so you may get lumbered with a fixed penalty for the late partnership Return but there seems to be nothing you can do to avoid that now.

NiceGuyEddie_2

For ease, I'd submit an individual self-assessment return with your 50% share in the self-employment section, mark the return as provisional and pay the tax as normal.

Once your partnership UTR is issued, submit the partnership return and incur the £100 late filing penalty, then resubmit your 2010 individual return as final, moving your figures from self-employment to partnerships.

adi2402

If you have already lodged the relevant paperwork with HMRC stating that the partnership began on 01/05/2009 then you will be required to submit a partnership TR for 2009/10.

I phoned HMRC about the lack of a partnership UTR a couple of weeks ago and their advice was to lodge a paper return at your tax office and put a note in the tax return other information stating that you havd tried to request a UTR and the only option to avoid submitting the return late was to lodge a hard copy return.

HMRC also said to appeal the statutory penalty on the letter accompanying the submitted tax return. Hopefully the appeal will stand.

Personally I do not really like the above advice but that is the advice that was given to me by HMRC after a few calls. Fortunately I received my UTR and did not have to follow this procedure.