Business Partnership - only earned 500 - do we need to submit tax return

susfloos

My friend and I registered as a business partnership last year. I was sent the self assessment tax return paperwork for 2020/21 for the partnership and for myself as a sole trader forming one half of the partnership. In that period we only earned 500 (so 250 each as no expenses) which I believe is under the 1000 self employed tax free allowance (whatever that’s called). I am wondering though, because we are a partnership are we excluded from this tax break? Do we need to file a tax return? Any advice most appreciated.
susie 

Pennywise

If you've been asked to prepare/submit a tax return, you have to do so, regardless of amounts.

You're best best is to contact HMRC, tell them your profits are below the threshold and ask (beg) them to withdraw the "notice to complete" the tax return(s).  If they'll do that, happy days.  If not, then, yes, you have to submit.

Just be aware that there are 3 returns in play, one each and the p'ship, so if you're asking for them to withdraw the notice to submit, you need to be very clear which they're withdrawing as to avoid all 3, you need 3 letters from HMRC confirming they don't want them.  Don't rely on what they say on the phone, you need paperwork to prove it and to appeal any future late filing penalties.

Dazed_and_C0nfused

There is no threshold for partnership income (Jeremy explained this on the op's other thread - not something I'd picked up on before!).

The op and partner just need to file the (three) returns rather than waste time trying to get HMRC withdraw returns that were correctly issued and need completing.