Am I liable?

Jmo1

I am a sole trader in a business partnership. Although our partnership return and my personal return is always filed on time, my business partner is usesless at getting his personal one done on time.

Am I correct in thinking that as long as my personal tax return and our partnership return is filed in time that I’m not liable in any way for his personal tax return? Apologies if this is a stupid question. My accountant doesn’t explain himself very well so was just looking for reassurance from others basically!

Many thanks!

01afraser4

Your assumptions are correct. You (or the partnership) will not receive any late filing penalties as a consequence of your business partner failing to submit their personal tax return on time.

jimmo

Whilst the advice above is perfectly correct failure to submit a Return on time significantly increases the chances that your partner's Return will be selected for a Compliance Check.
If that happens all aspects of his tax affairs may be scrutinized including the partnership and, by association, you.
Not exactly a pleasant experience, even if you personally come out of it with a clean bill of health.
If I were you I would certainly encourage your partner to be more careful about his tax affairs. I might even offer to do his Returns for him.

Cook_County

There is also the offence for failing to prevent criminal facilitation of tax evasion to consider: https://www.gov.uk/government/publications/corporate-offences-for-failing-to-prevent-criminal-facilitation-of-tax-evasion

Jmo1

Thanks for the responses guys. Cook_county, I’ve had a look through the guide, looks to me like it’s aimed at professions like accountancy and finance? I can’t see any way in which anyone linked to the company could commit tax evasion as I do the bookkeeping. From what I understand from reading it, the business can’t be held liable if someone is caught evading in their own personal tax return? I keep good records so hopefully would be protected. Worth speaking to my accountant to put some sort of framework in place maybe?