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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4881
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I am a partner in a business and my tax bill is low, however

Resolved Question:

I am a partner in a business and my tax bill is low, however my partners is very high, should I be worried that he has been doing something wrong? (he looks after all finances)
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.
Hello and welcome to the site. Thank you for your question.

Please expand on your concerns
Customer: replied 2 years ago.

My partners tax bill is nearly 10k and mine is 700, why the discrepancy? If its 50/50 shouldn't they be roughly the same?

Expert:  taxadvisor.uk replied 2 years ago.
Leigh, thank you for your prompt response
There appears to be significant variance between the two tax charges

You say you share profits 50:50
Do you see a copy of the partnership tax return filed at the tax office?

Does he have other income?

Do you both get similar personal allowance?

Many thanks

Customer: replied 2 years ago.

Hi There,

Ditto, We have been friends for 30 years I had all the contacts and experience and he had the collateral, I did most of the work as he had other business interests and we agreed to split everything down the middle, including rent and bills before the company went into the black. He gives me very little visibility of our weekly margin report and I have at times resorted to reverse engineering invoices from the bank. He does have another business which employs people paye, would this be why his bill is high?

Expert:  taxadvisor.uk replied 2 years ago.
Leigh, thank you for your reply.

Going back to your original question "should I be worried that he has been doing something wrong? (he looks after all finances)".

I think you should ask for weekly/qtrly margin reports to satisfy yourself that every thing is in order. Provided you are happy that your business is giving you the right return, you should not unduly worry about his tax bill.

You are aware he has other business interests. What you are not aware of is the level of profitability and the reason for higher tax bill.

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Customer: replied 2 years ago.

I was hoping you could help me with why the tax bill is so much higher? I think it may be due to his other business interests?

I have asked for three years for the weekly margin reports and only get them when it is capped by the finance company or very low.

If it walks like a duck and quacks like a duck, is it always a duck?

Expert:  taxadvisor.uk replied 2 years ago.
Leigh, thank you for your reply.

As an active business partner, you should by right have access to business records and profit statements. Maybe, you should talk to the company accountant and ask for them. I am surprised accounts don't need your approval if you are 50:50 partners.
I would concern myself with non disclosure or lack of availability of financial information to you and not worry about his high tax bill.

As far as his tax bill goes, in the absence of financial information provided, you and I can second guess the reasons for high tax bill..

Maybe his other business interests give him an incoome that has put him into higher rate tax band and he is paying tax at 40% on that income.

A duck is always a duck....I was once told!

I hope this is helpful.
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4881
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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