Year end question - newbie help please. [Archive]

Kelly_33

1st May 2010, 18:35

Hello,

This is my first post after reading lots of posts to gain some knowledge

My husband and I have / are in the process of joining the family business and I am trying to familiarise myself with the whole accounting / self assesment process - just the sort of person I am.

The business's accounting period is to the end of November - am I right in thinking that the 12 month period to 30/11/09 is the basis of the self assesment return for the business.

Thanks in advance.

Kelly.

David Griffiths

1st May 2010, 20:58

The partnership tax return for the income tax year 2009-10 will include the accounts for the year ended 30 November 2009. Profits (adjusted for tax purposes) will be divided among the people who were partners during that year and they will include their share of profit on their own personal tax returns. Partnerships are not subject to tax in their own right.

As you are joining the partnership now, you won't appear on that return. You will be shown on the 2011 return in respect of your share of profits from the date of joining (let's take that as 1 May for illustration purposes to 30 November.

Your personal basis period for the tax year 2010-11 will be your actual profits from 1 May 10 to 31 March 11. 7 months of that will be shown on the partnership return in 2011, and the other 4 on the return due in 2012. As your 2011 return will be due by 31 Jan 2012, there is every possibility that the November 2011 accounts won't be ready in time, so you will have to use estimates and correct the return when the exact figures are known.

For the year 2011-12 your personal assessment will be your share of profits for the year ended 30 November 2011.

That means that four months of profits will count in both years' assessments. Those are known as "overlap profits", and are noted on your self assessment return, as the figure is carried forward and eventually deducted from the assessable profits in your final self assessment.

Tax doesn't have to be taxing? Yeah, right! :rolleyes: