I have a client who had partnership income and sole trade income in 2006/2007. HMRC issued a notice under Section 12AC (1) and (6) TMA 1970 ref the partnership, all on time, but also issed a Section 9A TMA 1970 notice ref sole trade but have accepted that it was invalid as it was issued too late to have been received within the statutory date. Both related to losses and a tax refund was witheld.
All well and good but they had in the interim issued an assessment, which they called a discovery assesment using Section 29 TMA 1970 as authority as time was running out, thus reducing the overpayment from £51K to £22k (and come up with tax due of £29K by taking a negative from a negative and getting a positive) by disallowing the sole trade loss. The partnership loss stayed intact.
The partnership matter is now settled and a figure of tax is due by way of a settlement payment to be lade separately.
So, where do we stand regading the sole trade?
I am of opinion that the invalid Section 9A invalidates the asessment so the full £51K overpayment should now be released. There are also losses allocted to earlier years which should now be actioned resulting in a additional tax refund.
Am I right or will HMRC get an out via the Section 12AC (6)?
Was it really a "discovery" assessment seing all info was on the return itself?
- Auto-Enrolment 3,939 186
- Can I claim mileage? 231 6
- limited company for IR35 136 1
- Ir35 test 103 2
- Money laundering POCA 282 5
- Income recognition - release of product from a factory 132 7
- payroll software 228 2
- Mexican student in UK 164 4
- CIMA accountant wants to start consultancy 198 2
- Ownership of land - declaration of trust 59 2
- Finally a winner from HMRC!!! 260 2
- Annual Management Charge Rebates and Self Assessment Tax Return 173 1
- Partnership registered in error. No activities with view to profit. 143 2
- QuickBooks, Xero, FreeAgent and ClearBooks 882 19
- Dividend in specie 272 8
- Partnership Tax Return Deadline 113 1
- VAT on imports and the Flat Rate Scheme for VAT 198 9
- client threatening legal action 1,880 28
- Twenty signs your practice is bad at tax 737 8
- Partially exempt? 265 9
- Skandia using wrong address 500
- FHL, period of grace and Entrepreneur's relief 284
- Does anyone use PS Financials accounting software out there? 281
- Employee rewards 263
- Legislation access for part-time sole practitioner? 234
- Rental Property W&T And Equipment 227
- Gift of reversion and lease into trust by two different people - later PPR 225
- EPS Analysis - Change to EURO 216
- Etax Australian 175
- LLP in Construction Industry 127