Partnership tax return help!!

Mark2788

I'm doing my return online, I am getting a mortgage very soon and need to show my proof of income. I am in a partnership and usually include wages in expenses but doing this cuts my share of the profit and on my sa100 shows my salary too low. I think I need to not include wages as expenses which makes the partnership profit alot higher and fill that number in, it's just that way it means paying higher class 4 nic and tax etc. Is there anyway I can include wages as an expense and still have proof my wage is higher to show on sa302s?

Pennywise

Wow, sounds like you need to get the accounts/returned prepared professionally as you're clearly making mistakes. In a partnership, you don't get wages - you can't show them as expenses. You can't just show them as expenses to reduce the NIC - if you've done that in the past, it's wrong and you've underpaid, and you need to contact HMRC to correct errors in previous returns and pay any tax/nic underpaid.

Mark2788

That's fine it's been sorted, I wasn't owning tax before anyway as wasn't earning enough but now its over the tax allowance, just to confirm though because on hmrc website it says salaries can be used as an allowable expense? But is it right that for example turnover was 30,000 and expenses were 5000 we'd split 25,000 between each partner? We couldn't put wages in and make expenses 25,000 and split 5000 as share of partnership? Thanks for any help, think in the past we've been given bad advice but now sorting it

[Deleted User]

I would strongly advise that you take advice based on your questions - you risk getting the partnership return and both partners returns wrong - three sets of penalties. This could all get very messy especially if , as you say, you 'usually include wages as expenses.'

You can claim wages - just not yours. You include staff wages as an expense. 12500 appears to be each partner's share of profit - your drawings from the partnership are irrelevant.

Mark2788

It's ok both of your replies have reassured me on what I need to do along with a tax company I'm filing with, I just wanted to get everything double checked both on here and with the company that it's right to put the eg. 12500 as both share of the profit and in sa100 this will also have that figure as the share of the partnership profit and therefore taxed on that amount? Thank you

sheramber

You need to look at previous years as while your share of profit may be less than the personal allowance for tax you may have been due to pay class 4 NIC.