Partnership Tax Return

Partnership Tax Return

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I have a client with a 30 April year end who has been trading as a sole trader for a number of years.

On 1 May 2010, he took on a partner and the first partnership accounts were for the year ended 30 April 2011.

As there is at least one partner who is common to the trade on both sides of the change, the business is regarded as continuous, should a partnership tax return have been filed for 2010-11, as there will not be any period of account ending in the tax year 2010-11?

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By Phil Rees
29th Feb 2012 16:49

If a partnership exists in the tax year then a return must be made.

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Euan's picture
By Euan MacLennan
29th Feb 2012 16:54

Yes - of course

How else would the partners know what profit share to put on their personal tax returns for the 11 months of 2010/11?

Do I gather that the partnership was not registered with HMRC back in 2010?

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Replying to Jennifer Adams:
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By verybigshot
29th Feb 2012 17:32

The personal tax returns for 2010-11 were filed by 31 January 2012 as follows:

Common partner - sole trade profits for ye 30.04.2010.New partner - partnership profits from 1 May 2010 - 5 April 2011.

I assumed that as the first partnership period ended on 30.04.2011, and this period would be included in the partnership tax return for 2011-12, there was no need for a 2010-11 partnership tax return. I am not so sure now. And penalties are sure to arise!

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By Mr_Flibble2
01st Mar 2012 11:01

partnership return

As others have suggested - you should have filed a partnership return for 2010/11.

As there were no accounts ending in the tax year, the partnership return should have been completed on the basis as if there were accounts for the period from commencement to 5 April 2011.

 

 

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Replying to JCresswellTax:
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By verybigshot
02nd Mar 2012 11:01

Partnership Return

Thanks for your comments, I will file the return and grovel to HMRC with a view to cancel the penalties!

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Replying to JCresswellTax:
Quack
By Constantly Confused
02nd Mar 2012 11:27

OP

Mr_Flibble2 wrote:

As others have suggested - you should have filed a partnership return for 2010/11.

As there were no accounts ending in the tax year, the partnership return should have been completed on the basis as if there were accounts for the period from commencement to 5 April 2011.

 

 

 

If it makes you feel better OP I would have made the same mistake, I would have correctly shown the personal tax side, but the idea that a p'ship return was needed would have escaped me.  You live and learn!

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