Confused about the basis period

Discussion in 'Accounts & Finance' started by Statto71, Sep 11, 2019.

  1. Statto71

    Statto71 UKBF Newcomer Free Member

    14 0
    Hi,

    I recently filed the self assessment declaration for a new partnership, that is run between my wife and me. The partnership started on 18 April 2018 and my wife joined the partnership in June 2018. The partnership's accounting period is 6 April to 5 April. The partnership uses the cash basis for accounting.

    I am in the process of completing my wife's 18/19 self assessment for her, I was just going to happily add her share of the profits so that she could pay her tax. But then I came across the boxes where it asks about the basis period and an adjustment if the basis period is not the same as the accounting period. I wasn't expecting to (and would prefer not to) make any adjustments.

    I'm a little (actually very) confused about this. We've divvied up the profits between us on a simple % basis for the period to 5 April 2019, do I need to make some adjustments because my wife joined the partnership in June 2018 and the partnership started in April 2018? If so, what do I need to do?

    Thanks in advance for any clarification on this.
     
    Posted: Sep 11, 2019 By: Statto71 Member since: Apr 27, 2018
    #1
  2. Mitchells Bristol

    Mitchells Bristol UKBF Ace Full Member

    1,382 386
    Hi there. You don't need to worry about basis period adjustments, as your accounting year is in line with the tax year. So you will report profit/loss for the period from 18 April 18 to 5 April 2019
     
    Posted: Sep 14, 2019 By: Mitchells Bristol Member since: Nov 24, 2011
    #2
  3. UK Contractor Accountant

    UK Contractor Accountant UKBF Big Shot Full Member - Verified Business

    4,707 791
    Not quite sure how a partnership can start on the 18 April when there is only one person involved at that stage with your wife joining in june 18.

    The period 6 april 18 to june 18 should be reported as a sole trader activity with the partnership starting june 18.
     
    Posted: Sep 16, 2019 By: UK Contractor Accountant Member since: Sep 18, 2013
    #3
  4. Statto71

    Statto71 UKBF Newcomer Free Member

    14 0

    Ah. When I received confirmation from HMRC that the partnership had been set up, the letter explained that the next step was to register the (other) partners, so there was always going to be a gap between the partnership being registered and other partners registering. Clearly if I had done it immediately the gap would only have been a week or so, I didn't imagine that a few weeks would cause a problem.

    I'd never even considered that this might be an issue. May I ask if anyone could advise on how I should proceed, bearing in mind that I have already submitted the self assessment for the partnership?

    Thanks in advance.
     
    Last edited: Sep 25, 2019
    Posted: Sep 25, 2019 By: Statto71 Member since: Apr 27, 2018
    #4
  5. Scalloway

    Scalloway UKBF Legend Free Member

    15,389 3,257
    Was your wife working in the partnership prior to being registered with HMRC?
     
    Posted: Sep 25, 2019 By: Scalloway Member since: Jun 6, 2010
    #5
  6. Statto71

    Statto71 UKBF Newcomer Free Member

    14 0
    Yes, she was.

    The delay was largely due to the fact that we'd just moved back to the UK, she's not British and it took a bit of time to organise the NI Number.
     
    Posted: Sep 25, 2019 By: Statto71 Member since: Apr 27, 2018
    #6
  7. Scalloway

    Scalloway UKBF Legend Free Member

    15,389 3,257
    Then I would take the pragmatic view that she was a partner from the date the business started. Registration with HMRC just makes them aware she needs to pay tax on her share of partnership profits, it is not a legal requirement for being a partner.
     
    Posted: Sep 25, 2019 By: Scalloway Member since: Jun 6, 2010
    #7
  8. Statto71

    Statto71 UKBF Newcomer Free Member

    14 0

    OK thanks, that would seem to make sense, especially since it was effectively the case.
     
    Posted: Sep 25, 2019 By: Statto71 Member since: Apr 27, 2018
    #8