I act for two clients who are 50/50 shareholders in a limited company and also 50/50 partners in another, separate partnership. The two businesses operate out of the same premises and share overheads and joint expenses etc. on an agreed basis.
The clients in their capacity as directors of the company have overdrawn DLA balances which have properly been declared to HMRC. However, the company also has a debtor balance due from the partnership. There has historically been an inter-business balance between the company and the partnership caused by recharging of proportions of expenses and/or simply borrowing between the two business from time to time to fund cash flow requirements. Sometimes the balance has been credit, sometimes debit.
This has not been a problem in the past. However, in 2010/11 for some reason the inspector has raised a query, claiming that the inter-business balance falls within S.455 and should therefore have been declared on the supplementary pages on the CT600.
Now, any balance arising on this account has always been for business purposes. It has never represented anything used personally by the partners (that's what the DLA is for). It seems to me that the Inspector wants to treat the inter-business balance simply as an extension of the DLA, and I'm sure that S.455 ever intended this.
Does anybody out there have previous experience of this situation? Observations as ever gratefully received.
- The Budget dividend problem 4,792 68
- VAT on Fuel (Petrol, Diesel) Receipts 69 1
- Intermediaries and Personal Services Companies 292 8
- Companies House 307 8
- HMRC Information notice 1,035 24
- Bank account frozen 450 7
- IR35 Confirmation 57 3
- Charity accounts 83 1
- Jobs after completing ACCA 627 4
- Client having a go at me 988 16
- Tax Return Paid for but not submitted 272 3
- Related Party Disclosure for Director who resigned in year 144 4
- HMRC arbitrarily amending tax returns for higher rate child benefit charge 461 2
- Schedule A losses 888 14
- VAT and selling on Amazon 328 4
- Losses carry forward to self employed 667 11
- nevermind 424 3
- Car used both in a partnership and sole trader business - how to claim capital allowances? 242 1
- Payroll Manager - tax code for starter declaration 'C' 282 2
- Charging for Blank Payslips? 267 4
- Any knowledge of salesorder.com 458
- Could and would anyone here carry out a hot file review of some non statutory audit work please? 441
- Electric Car 368
- S222 Charge 292
- Corporation tax penalties and fines on the CT600 276
- IP trans to holding company 225
- Simple Partnership Agreement Template 177
- Career advice needed regarding accouting systems analysis 176
- Tax on donations for the beneficiary 167
- VT final accounts - investment properties 160