Self assessment - partnership vs individual return

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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)

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Scalloway Castle
By scalloway
11th Jan 2021 22:49

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.

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By Wanderer
12th Jan 2021 02:24

£10k goes onto partnership pages.
Nothing to do with self employment pages.

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By Tax Dragon
12th Jan 2021 06:19

The forms themselves tell you what to do. Definitively.

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Replying to Tax Dragon:
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By Tax Dragon
12th Jan 2021 06:22

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.

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Northumberland flag
By MJShone
12th Jan 2021 07:47

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.

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By cluelesslueless
12th Jan 2021 08:30

Thanks all - I appreciate the responses. So the amount drawn doesn't figure on the partnership pages anywhere only share of profits (assuming basis periods align/adjusted as necessary), which is as I thought.

Slightly confused by one thing now though, following Wanderer's post... Is/is not then the notional £5k drawn not added into the self employed profits/losses for the year?

Sorry for my confusion - a chaotic start to the week in our house and my brain is failing me!

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Replying to cluelesslueless:
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By Tax Dragon
12th Jan 2021 08:47

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.)

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Replying to Tax Dragon:
JCACE
By jcace
12th Jan 2021 09:56

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)

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Replying to jcace:
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By Tax Dragon
12th Jan 2021 10:01

Noted with thanks.

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Replying to cluelesslueless:
Scalloway Castle
By scalloway
12th Jan 2021 08:55

>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.

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By Paul Crowley
12th Jan 2021 08:53

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

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By cluelesslueless
12th Jan 2021 17:24

Thanks all - agreed I need to get the accountant to run us through it.

You all seem to confirm what I had thought (that each individual's tax liability is based on share of partnership profits, regardless of how much is drawn by that individual) but got confused reading through the HMRC notes with frazzled brain after a long day of work/home schooling. At least you have all eased my confusion before dealing with accountant.

Really appreciate the comments and replies (and patience) above. Thank you.

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