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?
- Payment on account penalties 38 3
- Tax on free shares 88 5
- Flat Rate Vat 14.5% and 5% reduced rate VAT 168 3
- What font do you prefer to use for correspondence? 157 8
- Capital allowances on sale and puchase of business assets 102 1
- Audit 444 14
- Course costs for retraining as a barrister 373 8
- PPR relief and half hectare rule 101 3
- Buying a horse?? 381 12
- Question on HMRC past taxes (+penalties) on non-resident 178 2
- Uncomfortable with some advertising Sift takes 730 21
- PITA ex-client 201 9
- How to post Sales figures in Sage50 Accounts (we use separate Sales ledger) 237 6
- CTA and Tolley's tax handbooks 345 9
- Can I contribute to SIPP if I pay no salary/dividend from ltd company 319 5
- How to complain about HMRC 1,662 19
- New supplier 140 3
- What quality paper do you use for correspondence? 824 22
- Capital allowances on a 3G Pitch 249 13
- Scottish Independance 881 24
- CTA study material 798
- Anyone have clients that use Pay4Later to offer customers credit? 490
- Raiders of the Lost Tax File 451
- Employment related securities question 317
- AIM Stocks and IHT 303
- Expat pension contributions? 276
- Tax Relief for overseas employees 273
- Trust for Employee 252
- Service Charge Accountant Career Options 218
- IPP (International Pension Plan) income 157