Complete a partnership return if no accounts end in tax year in Personal Tax
Historically, where a partnership did not have accounts ending in the tax year, there was no requirement to disclose any figures on the SA800. However, HMRC changed its guidance in the Partnership Tax Return Guide: Tax year 6 April 2018 to 5 April 2019 (2018–19) to:
If no accounts end in 2018 to 2019 Make sure that there’s at least one accounting period ending in 2018 to 2019. If you do not, the partners may have to use estimates to calculate their tax liability for 2018 to 2019 and could end up being charged interest if the estimates are too low. If no accounts end in 2018 to 2019 then:
We think 'details of the partnership's income and expenses...' means the actual expenses for the period (rather than a simple time apportionment), which is why the figures are not completed automatically. If partnership accounts were drawn up for the period 06/04/18 to 30/04/19 (i.e. no period ending in 18/19) then you'll need to complete the 'normal' business account schedule for the full year, which is described in the following example.
Example
In this example, we will assume profits of £100,000 for the 13 month period 6/4/18 to 30/4/19.
For the purposes of this example, there's one partner, whose profit share (on a basis period of 06/04/18 to 05/04/19) will be £93,589.74 in 2018/19 with overlap arising in 2019/20.
This deals with the partner's position, but you'll also need to deal with the disclosure on the partnership return. Go to the Business Explorer/Information Explorer. You should find a folder called
Tax Year 2018/19
.Complete the
Tax Year 2018/19
item with 'details of the partnership's income and expenses' for the period to 5 April 2019. These figures will not include capital allowances or any adjustments to profit other than disallowable expenses and goods taken for own use. In this example, we will assume £90,000 for the period 6 April 2018 to 5 April 2019.
Any figures entered in the ‘Tax Year’ dialog will be disclosed on the 2018/19 partnership return. The Adjusted profit/loss above will pull through to the partner's individual return as their share of income for the year with a basis period adjustment to reflect the effect of capital allowances, deductions from profit and any other difference between the time apportioned share of adjusted profit for the full period and his share of income for the year.
In this case the partner will have income of £90,000 (per the Tax Year dialog above) with a basis period adjustment of £3,589.74 to give total taxable profits in 2018/19 of £93,589.74 as calculated previously.
The figure disclosed as Income on the partnership return will agree with that posted to the individual partner(s)' returns. The adjustment will ensure that the partner is correctly taxed on the appropriate profits for the period, and not what we've disclosed in the Tax Year dialog in the partnership.