I have a new client who is a musician who has had some health problems and hasn't done his tax since 2005/2006. Well I have managed to get everything sorted out and now a bombshell, his manager sent me a partnership tax return for 2010/2011 - I didn't know he was in a partnership! (apparently this was the first year) The other partner was the nominated person on the return (was submitted online last year) - do I have to enter these figures on my client's return? Any help would be gratefully received, as I cannot think straight now!
Did the client inform his previous accountant that he was appointing you and was a clearance request sent to them? If not, it may not be too late and you can then ask for closing balances/recent tax history.
No he didn't have an accountant, went self employed in 2005, he suffered from health issues (mental illness) and has not completed a tax return at all, it was only when his tax penalties and interest amounting to over £4k that he has decided to get help. Been working hard all week to get his tax up to date, so cannot think straight!
Sorry, I jumped to a conclusion there; however any tidbits you can obtain verbally from the manager will be worthwhile. As you probably realise, the exact beginning date will be on the relevant Partnership Return, so this and a comparison of the turnover will give you good clues on what, if anything, to allocate to self employment.
HMRC will be sympathetic when they know of the health issues and (with your clients permission) any medical evidence of this will help.
Think I must be missing something. ( nothing new there )
If the partnership Return has been submitted, the client in question will have been allocated his "profit" and this figure can be taken from the Partnership Return.
Unless of course the partneship was one "business" and he was also self employed in another "business"
No Jay, you're not missing anything - you are correct - this has now been clarified from the other member of the partnership. Apparently any tours go into this partnership agreement with expenses for their studio, hotels, food, roadies and management team - the remainder being their profit. The profit is then classed as self employment income and is treated as his self employment. Panic over!
Hi, its still classed as partnership income and entered as such on the partnership pages of the self assessment. Any income outside of the partnership may be derived from self employment. Tim
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