Calculating NI in 2 Partnerships

[Adviceneeded]

Hopefully some one will be able to advise on this.

If you are self employed and a partner in 2 firms then the total class D NI you will pay will be based on the same as your total profits for income tax purposes.

Where one business makes a loss and the other makes a profit then surely the NI is based on the aggregate total of both firms? It seems that the income tax is calculated on the aggregate total but HMRC seem to think that they ignore the loss making firm for NI purposes.

Anyone idvise?

Thanks.

[robbob]

Hello advice

I am pretty sure you are right that the losses can be set off see link below and help sheet 220.
I am presuming you are talking about current year profit and current year loss.
http://www.hmrc.gov.uk/manuals/nimmanual/NIM24615.htm
http://www.hmrc.gov.uk/helpsheets/hs220.pdf
Did you enter the adjustment to national insurance due on the tax return (Box 101 i think)
If you did not claim the adjustment then the return would be processed without the loss being offsett for NI purposes.

Note you have to be more careful when losses are brought forward or carried forward as you may be able to only set against profits from the same trade.

[Adviceneeded]

Robbo

Yes - same year. Entered the adjustment on the tax return and it was rejected on line. Spoke to HMRC local office and they said it must be an error with the server. They advised to submit it with incorrect NI due and then put in an explanation with the calculation in the additional notes.

Of course now HMRC are chasing for the full amount. Have written to HMRC, but they seem incapable of replying within 2 months.

Your link to NIM24615 does seem to support my view.

Thanks