Partnership Self Assessment Return

[Will C]

Hi folks,

I am completing a partnership self assessment (SA 800) return for the first time.

We have no income as of yet but have purchased equipment / supplies for the operation of the partnerships services, which I believe I can add to the return in order to receive tax relief.

Is this correct? And if so, where on the form do I include such information?

Thanks,

Will

 

[Joyous]

We have no income as of yet but have purchased equipment / supplies for the operation of the partnerships services,

Have you actually started trading yet? If not then all of this is pre-trading expenditure which you'll add to your accounts once you start trading. If you haven't started trading there should be no need for a tax return.

 

[Will C]

Have you actually started trading yet? If not then all of this is pre-trading expenditure which you'll add to your accounts once you start trading. If you haven't started trading there should be no need for a tax return.

Hi there, thanks for the prompt response!

No, we haven't started trading yet.

When I spoke to someone at HMRC, they said we can still claim on the expenditure on on this year's tax return.

If we do what you are suggesting, do we still include the expenditure on future year's tax returns and therefore still claim tax relief ?

New to it all, so a little confused

 

[Joyous]

they said we can still claim on the expenditure on on this year's tax return.

I'm noting the use of the words "we can" instead of "we must".

If we do what you are suggesting, do we still include the expenditure on future year's tax returns and therefore still claim tax relief ?

Yes. You total up all the pre-trading expenditure and treat it as it it had been incurred on the first day of trading. It get's added to the rest of the trading expenses to reduce the profit figure.

Unless you have specific reasons for doing so I see little point in wrestling with a partnership tax return if you don't have to.

 

[Will C]

I'm noting the use of the words "we can" instead of "we must".


Yes. You total up all the pre-trading expenditure and treat it as it it had been incurred on the first day of trading. It get's added to the rest of the trading expenses to reduce the profit figure.

Unless you have specific reasons for doing so I see little point in wrestling with a partnership tax return if you don't have to.

Thank you, this is most helpful!

For future reference, do you happen to know which part of the self assessment return I would include these pre-trading expenses ?

Thanks again

 

[Joyous]

For future reference, do you happen to know which part of the self assessment return I would include these pre-trading expenses ?

In the same boxes where you include the trading year's expenses. The're treated as if made on the first day of trade.

 

[Will C]

Hi there,

Was wondering if you could further support me with a query directly related to the last one you supported me on.

I am now going to be forming a CIC in place of the partnership. Will the same apply to expenses or do I need to do a partnership return before the partnership closes down and the CIC starts?

Thanks

 

[Joyous]

Hi there,

Was wondering if you could further support me with a query directly related to the last one you supported me on.

I am now going to be forming a CIC in place of the partnership. Will the same apply to expenses or do I need to do a partnership return before the partnership closes down and the CIC starts?

Thanks

Pre-incorporation expenditure is the company equivalent of pre trading expenditure and it works the same way. Business expenses of the intended trade for up to seven years prior to incorporation date are treated as if made on the first day of trading.

 

[Joyous]

do I need to do a partnership return before the partnership closes down and the CIC starts?

Get the nominated partner to call HMRC on 0300 200 3310 and tell them the partnership has ceased. If it never traded they may withdraw the return and mark it as ended. If not you'll have to submit a nil partnership return.

 

[Will C]

Get the nominated partner to call HMRC on 0300 200 3310 and tell them the partnership has ceased. If it never traded they may withdraw the return and mark it as ended. If not you'll have to submit a nil partnership return.

I haven't actually submitted a partnership return yet anyway. So I can just submit a nil return now?

 

[Joyous]

I haven't actually submitted a partnership return yet anyway. So I can just submit a nil return now?

You can if you wish but I'd have thought it easier to get the return cancelled as the individual partners will also have to include the partnership results in their own tax returns.

 

[Bobbo]

Pre-incorporation expenditure is the company equivalent of pre trading expenditure and it works the same way. Business expenses of the intended trade for up to seven years prior to incorporation date are treated as if made on the first day of trading.

Pre-incorporation expenditure is not the company equivalent of pre-trading expenditure.

For a company, pre-incorporation expenditure is that expenditure incurred before it was incorporated (i.e. existed), pre-trading expenditure is that expenditure incurred after it was incorporated but before it commenced trading. Pre-incorporation expenditure is naturally also pre-trading because if the company doesn't even exist yet it certainly can't be trading.

It may be that a company can treat pre-incorporation expenditure in the same way as pre-trading expenditure but to state they are equivalent is a simplifying to the point of being misleading.

 

[Deleted member 362062]

Have you actually started trading yet? If not then all of this is pre-trading expenditure which you'll add to your accounts once you start trading. If you haven't started trading there should be no need for a tax return.

This!

 

[Paul Kelly ICHYB]

I can add to the return in order to receive tax relief

we can still claim on the expenditure on on this year's tax return.

What exactly were/are you expecting? You may be in for a surprise if you expect a wad of cash!