Hi all. I've just signed up hoping someone can offer an answer to a reasonably simple question RE individual self assessments and general partnerships. I've found the community knowledge on here really useful when lurking, so here goes...
I am one half of a (very) small business operating as a general partnership (NOT LLP) and (with some help from a tame accountant) we've submitted out partnership return to HMRC relatively straightforwardly. Our personal self assessments are causing a headache however. I'm going to use an example that is hopefully straightforward to illustrate:
Partner A's allocated share of profits is ~£10k, but they have not drawn the full amount. They have drawn ~£5k. How is this reflected in their individual tax return? For example (AIUI) the partnership profit of £10k translates across (box 11 on partnership return to box 8 on the partnership pages of their return). How is their "share" of partnership profit then figured into the Self Employment pages/Business income section of their personal return?
That seems a simple enough question but getting a definitive answer isn't. Any help would be much appreciated. Thanks!
Replies (12)
Please login or register to join the discussion.
Each partner should enter their share of taxable profit from the partnership return. Whether they took any money out of the partnership business is irrelvant. That is just them shifting their own money around.
Oh, except you are doing it yourself on HMRC software, not the forms. That might be more tricky. In fact, I'm not sure you can do it that way at all.
You can't always just copy across from the partnership return - unless you have a year end between 31 March and 5 April inclusive, it depends on whether you're in the first couple of years etc. Assuming that you'd be using the "short" partnership pages for a paper return if you were filling in a paper return (which you can't do at this stage) see the notes here which explain basis periods : https://www.gov.uk/government/publications/self-assessment-partnership-s...
As others say, it's the profit figures, not the amount you've taken out of the business which are relevant.
No. If you'd seen a printed SA100 (tax return form), you'd know it had separate pages for a self employment and for income from a partnership.
I'm not sure you can complete the partnership 'pages' using HMRC software. Hence my second comment above. (There are some things you can only do via an accountant or, failing that, with commercial software. This may be one of them. As I say, I'm not sure.)
As long as it's trading income only, you should be able to use HMRC filing for an individual tax return, including your share of taxable profits etc from the partnership allocation pages(s)
>Is/is not then the notional £5k drawn not added into the self employed profits/losses for the year
No! It is your own money you are shifting around, it is not taxable income. Your taxable income is your share of partnership profit.
Get tame accountant to explain
The figures from partnership return get entered on partnership pages of personal return
Your question and answers show that you are not yet ready to submit personal tax returns yet