Restrospective Partnership
groundy
Registered Posts: 495 Dedicated contributor 🦉
Think I know the answer to this but thought I would open it up for ideas:
I have a hairdresser client that employs her sister (PAYE) and had help funding the business from parents. The client only draws £200 per week but had taxable profits of £23k for the year. It has now for the first time ever been explained to me that the business is owned by all four family members and therefore the ST isn't happy at having to declare £23k to tax credits when she only receives £200 per week (which is what she declared to tax credits).
My question is can I go back and add the other three family members earlier (ie from 6 April 2011) and therefore submit a partnership TR and amended personal tax returns.
Going forward we are looking at Ltd or Partnership but would appreciate any thoughts on the 2012 year end.
Cheers Ste
I have a hairdresser client that employs her sister (PAYE) and had help funding the business from parents. The client only draws £200 per week but had taxable profits of £23k for the year. It has now for the first time ever been explained to me that the business is owned by all four family members and therefore the ST isn't happy at having to declare £23k to tax credits when she only receives £200 per week (which is what she declared to tax credits).
My question is can I go back and add the other three family members earlier (ie from 6 April 2011) and therefore submit a partnership TR and amended personal tax returns.
Going forward we are looking at Ltd or Partnership but would appreciate any thoughts on the 2012 year end.
Cheers Ste
0
Comments
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What a mess.
If it actually was a genuine partnership, then it was a partnership and a partnership return will be due. And extra fees for you. There shouldn't be any late filing or late registration penalties but all 4 partners will be liable to Class 2 NI on those profits.0 -
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Thanks Dean, I should avoid mental arithmetic. I thought 23k / 4 would put them over the SEE limit.
I hate partnerships and thankfully only have "bog-standard" 2-person partnerships. To me, they are far more complex than limited companies.
Thanks for the heads up on sleeping partners.0
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