A partnership of 6 GPs started trading under a GMS contract on 1/4/18. A partnership tax return must be submitted to 5/4. Would we to submit a nil return stating our financial year 1/4/17 -31/3/18 (when we didnt even trade) or do we need to apportion the month of April ?
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"Accounting dates in the period 31 March and 4 April
The basis period for the tax year in which a business starts (year 1) usually ends on 5 April. However, if a new business chooses an accounting date of 31 March or 1, 2, 3 or 4 April, the accounts are treated (unless you elect otherwise) as being made up to 5 April and there is no need to add in any profits from the next accounting period if those profits are taxed in the following year. There is no overlap profit (see below) and no overlap period."
"If your businesses started in the period 1 to 5 April, we will treat the profit for year 1 as nil. This won’t affect anything else that depends upon the date, or tax year, your business starts."
https://www.gov.uk/government/publications/how-to-calculate-your-taxable...
You will need to include the profits attributable to the period 1 to 5 April. There will then be overlap relief for the profits taxed twice.
HMRC used to have a concession where 1 April could be treated as 6 April for purposes such as these. I once wrote to HMRC and they cancelled the Partnership tax Return for 1 April to 5 April but that was a long time ago.
HMRC used to have a concession where 1 April could be treated as 6 April for purposes such as these. I once wrote to HMRC and they cancelled the Partnership tax Return for 1 April to 5 April but that was a long time ago.
It's not a concession. It's actually in the legislation (ITTOIA 2005, s209)
You only need to submit a return if the year end isn't 31 March. In such a case, normal overlap rules will apply.
Either the return will be nil or HMRC, when the situation is explained, will withdraw the request for the return.
There is no functional difference between 1 April to 31 March and 6 April to 5 April anywhere except in the HMRC software that automatically generates the requests to file a return.
Up to you whether doing a nil return or seeking to have the request withdrawn will be less work, I'd say it's about 50/50.
I learned a long time ago never to put a start date of 1 April on anything for just this reason. I always use 6 April but obviously mop up anything for the first 5 days of April. Is it right? No, but it's practical.
There are no basis period or overlap relief for a partnership tax return.
A return is only needed if there is an accounting date falling in the year.
Basis periods and overlap relief, if any, are picked up from the partners' returns.
There are no basis period or overlap relief for a partnership tax return.
A return is only needed if there is an accounting date falling in the year.
Basis periods and overlap relief, if any, are picked up from the partners' returns.
Indeed, but if this is a new partnership starting on 1st April (which is my inference), the problem is identical.
What problem?
The return asks for details of the partnership’s trading income and expenditure for the accounting period, or periods, ended on a date in the period 6 April 2017 to 5 April 2018.
If the partnership started on 1/4/2018 and its accounting period is to 31/3/2019, it has nothing to enter in the return.
Either submit the return as nil or ask for it to be withdrawn.
No one has mentioned s210(4) of ITTOIA. It answers your question directly. Lion was mighty close, but misapplied the section he quoted. Broken record time again, but it's yet another example of why it's worth checking the law.