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Second business, second partnership tax return

Second business, second partnership tax return

As my head is astray doing these last few tax return, even the simplest problem is hurting my brain!!

This isn't for this years tax return but a client of mine has a business (a shop) and this is run as a partnership. The owners have started up another shop in another town and it is essentially the same type of shop with bulk buying, etc. Does this second business have to be registered separately as another partnership or can next years figures be merged for tax return purposes?

I intend to advise the client to incorporate the businesses and in which case presumably they can be two income streams for one company?


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By Old Greying Accountant
29th Jan 2013 12:46

Do John Lewis ...

... do a separate set of accounts for each store, or Tesco?

The answer is whatever you want, it might be better to run as two businesses if the aim is to establish the second and then sell as a going concern, but if more planned then may be not.

A common model would be a holding company with each shop as a separate subsidiary company. This is more to protect group assets from the failure of a member and you need to watch thresholds, but with little difference between SCT and MCT theses days that is not such a problem.

As it is a 2013 issue you may get fuller answers in February though!

Thanks (1)
29th Jan 2013 13:14

Thank you very much for your answer, very helpful.

I am seeing the partners tomorrow to get their 2012 tax returns signed and I wanted to have a quick think about next years set up so I can discuss these matters tomorrow.




Thanks (0)
By DMGbus
29th Jan 2013 13:33

Unincorporated trades / branches

In my experience when a one-branch business (say a partnership) expands from one outlet to two, the new outlet is treated as an additional trade, so in a partnership SA800 context that means an additional P&L a/c for the additional branch.

This treatment has advantages and disadvantages.  As a new trade the losses can be carried back under the rules for new trades.  On the other hand it might seem like a lot of hassle preparing two P&L accounts for one partnership.

I stress that this is on the basis of my 38 years experience dealing with small shops / pubs.  I am unaware of any relaxation on this in rercent years.  When a business has many branches then the situation where an odd new branch or two is just an extension of an existing trade, not a new trade.  It is perhaps subjective and open to question.

In my dealings / negotiations with HMRC on this suject matter in the 1970's and 1980's it was HMRC's arguement that a new branch was new customers so a new trade,   This was particularly relevant then with tied pubs where proprietors would move to a better pub after proving themselves at the starter pub.   In those circumstances it was definitely not a continuation but rather a cessation of starter pub and commencement of a new trade at the new pub.  Bearing in mind all the section 117 and section 118 implications for commencements and cessations in those days I surely would have preferred the concept on the new pub being and continuation of the old business, but this was not allowed.


Thanks (1)
29th Jan 2013 13:40


Thank you for that reply DMGbus.

Whilst the businesses are unincorporated I will be preparing two profit and loss accounts so we can see how each shop is doing.

Its whether the second shop needs to be registered as a separate partnership as I would need to do that rather than wait until I do next years accounts.

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By DMGbus
29th Jan 2013 14:00

Same partnership, same UTR

As I see it the new branch is operated by the same entity, the same partnership - so will be covered by the same UTR so no extra / additional registration (just like the existing VAT registration covers the new branch).

Where it gets messy is if the partnership has a financial year end other than 5th April / 31st March.   I will go into more detail on this if the can confirm the following:

Established financial year end for existing partnership shop.

Date new branch opened.





Thanks (0)
29th Jan 2013 14:04


Established shop year end: 5 April

Date new branch opened: 30 March

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By DMGbus
29th Jan 2013 15:24

No complications with these dates

The y/e 5 April 2012 SA return would included established branch for same year to 5 April 2012 plus the few days 30 March 2012 to 5 April 2012 for new branch.

There would have been complications with different dates - like the Painter & Decorator who had a y/e of 30th Sept and started / changed his business to gardening after 30th Sept but before 5th April - HMRC wanted a cessation of Painting & Decorating and new business commencement of Gardening.  In this instance my argument that it was a property maintenance business contniuing prevaled - so no cessation / commencement (diversification of same trade, existing Painting & Decorating customers often had gardening done by him after my client had done Painting & Decorating for them).


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