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10/11 partnership penalty for partnership starting date of 1/4/11

10/11 partnership penalty for partnership...

Two clients started a partnership from 1/4/11 and have been sent late filing penalties for themselves and the partnership for 10/11. Is this right, as a 31st March year end was always allowed to be treated as a 5th April year end for tax return purposes? Would an appeal on this basis be successful? They were intending to use 31st March as their first accounting date.

If not, is it possible to go back and amend one's starting date by five days?!

Thank you.


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03rd Mar 2012 21:14

Was a notice to file issued?

Hello there

If a notice to file was issued, and a tax return was not filed, then my view is that the penalties should stand.  The partnership existed in the tax year, albeit the profit for that year would be £nil.  Therefore, the returns should have been submitted showing a pofit of £nil.

Unfortunately, I think an appeal would be unsuccessful - but always worth a punt!

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04th Mar 2012 11:29

1st April 2011 was a Friday

I agree that if a (notice to file a) partnership tax return was issued and one was not submitted, the penalties are chargeable, but you lose nothing by trying an appeal.

I am puzzled as to why anyone would have said that they started a partnership on a Friday.  Admittedly, the same penalties would apply if the partnership was notified as starting on the following Monday, 4th, or Tuesday, 5th April, but Wednesday, 6th, or Monday, 11th April would have avoided the problem.  Whoever specified 1st April as the start date has cost the partners the £200 penalty.

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04th Mar 2012 19:13

when did trading start?

The mere existence of a partnership (or Ltd Co or LLP) does not bring it within the tax net - it has to do something taxable and if no trading (or similar) took place before 6 April you could try and argue that the notice was not valid because nothing had happend.

We had a similar situation - a dormant LLP with a notice to file issued but we were within time so we filed an SA800 with no numbers in it at all because that was less hassle than arguing that no trade had started.

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05th Mar 2012 20:27

what would you do?

It seems they were unclear about when exactly they started to trade, as there were pre-trading expenses, and used 1st April as it was about right and they thought it matched the tax year. I have asked them to check when they first took a job. It might be later in April which might help an appeal (though probably not).

But if they say a date in late March, would you leave the commencement date as it is, or go to the palava of estimating a tiny amount of profit (up to 5th April 2011) and amending later, and presumably having a bit of overlap profit hanging about. How much do HMRC mind about this sort of thing? What if it was literally four days or something, say Mon 28th March?

I really want to be prepared when they come back to me with more information!

Thanks very much.


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05th Mar 2012 20:36

A great example of why an accountant should be engaged at the beginning.  Ties in with Q&A about the demise of the small practice accountant.

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