when to be a partner

[Parker]

Would some one please tell me the implications of becomming a partner in a business part way through the tax year

[Huw Williams]

Short questions often want long answers and yours depends on so many different things.

If someone else is preparing the partnership figures, they will tell you what your share of the profit is (for whatever period or periods are appropriate depending on the accounting date used by the business).

You then include this figure (or these figures) in your self-assessment return.

The difficult bit is that in your first year you are taxed on your income from starting as a partner up to the following 5 April.

In later years you are taxed on your share of the partnership income for the accounts ending in the tax year.

This often means you pay tax on the same income twice and have to remember the figure for when you cease to be a partner.

I would suggest you start by looking at the partnership pages on the HMRC website:

http://www.hmrc.gov.uk/sa/partner.htm

to make sure you do everything you need to do.

If the year end is anything but 31 March / 5 April then you either talk to a tax professional or have a look at the notes on preparing the partnership pages for self assessment:

http://www.hmrc.gov.uk/worksheets/sa104-notes.pdf

These will tell you what other publications your may need to ask for to understand the tax calculations.




Huw Williams
Nottingham

0115 914 6846

enquiries@huwwilliams.co.uk