Can HMRC penalise if they didnt issue a return ?

Can HMRC penalise if they didnt issue a return ?

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A client of mine (A) has a partnership with one other (B) individual, set up before joining me.

The agreement was that the other individual would not receive any profit share for a few years and was happy with that.

The partnership made a loss in the first 2 years - has never made a profit.

We've now discovered that his partner (B) did'nt disclose this as a new source of income to HMRC.

(I suppose, it was loss making and he agreed not to be initially entitled to any profits anyway).

The partnership return has been bounced because of lack of a valid UTR number for partner (B).

B has applied for a UTR, the partnership return will be submitted in time.

What about B though - could he be penalised?

He has'nt received or been asked to submit a SA return, so could he be penalised for not doing so?

And the penalties for not declaring a new source of income are based on % lost revenue, of which there was none.

Am I correct in thinking that no penalty is chargeable?

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By mickeyparish
03rd Sep 2013 16:37

Was it a source of income or not ?

If there was no income for him as an individual, how could he have filled in a SA anyway ?

As I read the facts outlined, the partnership had the income, not the partner concerned.  I'm assuming we are talking of a LLP ?

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By Albie
04th Sep 2013 16:31

Good point. Its just the failure to submit the SA 401 now.

Thanks Mickey,

Ah - that's a good point

Your assumption is correct, its an LLP - and there was no income to distribute anyway.

He should have completed a form SA401 - I hope there's not a penalty for not doing that.

 

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