How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask bigduckontax Your Own Question
bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4188
Experience:  FCCA FCMA CGMA ACIS
75394688
Type Your Tax Question Here...
bigduckontax is online now

My wifew and I are ceasing our business after 10 years and

Customer Question

My wifew and I are ceasing our business after 10 years and the business has £8000.00 profit split between my wife and I, can this be accessed as a payment or do we get no tax refund, all tax payments are up to date.
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello, I'm Keith and happy to help you with your question.

When you shut down and have closed your self employment with HMRC and paid all appropriate taxes the remaining balance can be distributed amongst the proprietors. It is not a capital gain so there are no Capital Gains Tax problems. It is just profits which have been tax but not drawn.
Expert:  bigduckontax replied 3 years ago.
Amendment; paragraph 2, line 3, delete 'tax' insert 'taxed.'
Customer: replied 3 years ago.

Hello my accountant has said the £4000.oo each is not payable but is just a profit figure, how do I go about receiving the payment.

Expert:  bigduckontax replied 3 years ago.
If it is in the account it must be somewhere. It is always possible that you have withdrawn it at some stage. A balance on the Profit and Loss account must be matched by assets less liabilities on the other side of the balance sheet. What your accountant is saying simply does not make sense from a book keeping point of view. Where are the assets?

Can you please provide a little more data?
Customer: replied 3 years ago.

The business is a day nursery with the building and all the equipment already paid for and the building has not been sold just the business ceased, the accountant has said their is £4000.00 in profit each when the accounts are done up to the tax year. I asked were is the profit and he said it is not paid out but their would be £750.00 overpaid in tax paid out from his account to my wife and I, he said the HMRC would pay the money to him.

Expert:  bigduckontax replied 3 years ago.
Really? Did you authorise an agent to receive any overpaid tax when you submitted your annual self assessment tax return?

When the building is sold and the selling price received then presumably the funds will be available. The gain made may be subject to Capital Gains Tax. The sale of the equipment will release more moneys on the capital account and any gain will pass into the profit and loss account and have to be taken into account for Income Tax purposes. Sorry, you are not out of the wood taxation wise yet.
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 3 years ago.
Thank you for your support.