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Irish income to 31/12 on 05/04 SA return

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Hello 

I have a client that's a Scottish individual who has rental income from Ireland.

Irish tax return is done by Irish agent and tax year goes to 31/12.

My client's previous adviser did the UK self assessment return to 05/04/2020. They have put in the return notes that 31/12/2019 income has been reported on 05/04/2020 return because 2020 figures were not yet available, and that an amendment is to be lodged to remove 3 months of 2019's figures and add 3 months of 2020's figures when the 31/12/2019 Irish tax return got done. 

Irish tax return to 31/12/2020 has now been done and sent to me.  So it's time to make the adjustments to 05/04/2020 return.  (Side note - HMRC tell me a technician from their side will have to amend the 05/04/2020 UK return over the phone because I didn't submit it.)  

 Is this a generally accepted method of preparing the UK tax return in terms of reporting provisional figures and then going back to amend every year? Or more to the point, is there an easier yet still acceptable way? 

Also not sure whether to adjust 3 months (3/12) or to the day (95/365) when doing the adjustment. Thoughts would be appreciated.

Thanks 

Debittomycredit

Replies (8)

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By Debittomycredit
12th May 2021 19:22

Edit: para 3 should have said 'when the 31/12/2020 return got done'

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By Wanderer
12th May 2021 19:32

Debittomycredit wrote:

Or more to the point, is there an easier yet still acceptable way? 

I get the remittance advices / agents statements together with costs details and just draw up for the UK year.

For the Irish tax deducted I just apportion. Sometimes estimate for the 3 month period and adjust up for that the next year so year on year have only claimed the actual Irish tax deducted. I don't go back & amend the previous year.

How much is the difference?

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Replying to Wanderer:
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By Debittomycredit
12th May 2021 19:46

That sounds like a more sensible approach to me as the differences are absolutely negligible that I will now have to retrospectively adjust for.

Also it doesn't seem correct to me the way the previous UK advisers have done it. Surely what should be reported on the UK return, like you've said, is the UK account of rental profits for the tax year (i.e. to 5 April). It shouldn't be based on what's going on a return in Ireland which has a different year end date, not to mention different tax rules (mortgage interest for example is allowable in full in Ireland).

Thanks for your prompt reply its really helpful.
Would still be interested in other responses too.

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By mikeyban
12th May 2021 23:04

I had a client who had an American pension... always entered the year to the previous December but stated what I had done in the additional info box...

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By sarahg
13th May 2021 06:52

I would continue to use the 12 months to 31 December for the Irish income, as long as it is consistent this will be OK

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Replying to sarahg:
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By Debittomycredit
13th May 2021 09:20

Hi Sarah G - the problem is that they haven't used 12 months to 31 December. They've done a system of pro-rating to account up to 5 April (by the looks using a round 3 months), and then each year they are going back and adjusting the tax return after filing! Hassle!! I want to move away from that if I can. In all honesty I just want to do it properly!! HMRC website indicates accounting for it the same as UK property income, which to me says do a set of rental accounts for the Irish property to 5 April.

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By Paul D Utherone
13th May 2021 10:37

Re you " (Side note - HMRC tell me a technician from their side will have to amend the 05/04/2020 UK return over the phone because I didn't submit it.) "

What software do you use? I believe most third party software should now allow you to mark a return as amended and submit online

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Replying to Paul D Utherone:
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By Debittomycredit
13th May 2021 10:53

I use Taxfiler but I don't have the return on there to mark and resubmit because I never prepared it in the first place :)

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