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Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13870
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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12 years my business partner and I run a dental practice

Resolved Question:

For over 12 years my business partner and I run a dental practice on 50-50 share ownership. Our accountant has been preparing accounts on an self employed basis (expense sharing) for each one of us. I was recently told by a dental accounts specialist that our accounts should have been prepared as a "partnership" from the start. Can you please tell me what implications there may be if we contacted the HMRC and said to them that we have been doing our accounts wrong?
Submitted: 1 year ago.
Category: Tax
Expert:  Sam replied 1 year ago.
Hi
Thanks for your question - I am Sam and I am one of the UK tax experts here on Just Answer.
You should indeed of been submitting the partnership tax return and on this return declaring the joint income, less joint expenses then leaving a net income that would be split 50:50
You each then would have completed your own self assessment to declare you share of the partnership income..
The question is - will this later the amount of income each of you declared and thereby create a different tax and Class 4 National Insurance position -
If yes, then there will be taxed paid too much on on and too little on the other, which should then actually provide a correct position overall, so its really just the fact that the partnership was not registered and the partnership returns not submitted.
So if there is no loss of revenue to HMRC they will more than likely recommend that you start effectively from the latest return position (which may be for 2014/2015 if this is still outstanding - and note if filing a paper partnership return then the cut off date is 31/10/2015.
And the fact you are coming forward to make this disclosure also will stand in you in good favour.
But this also is dependent on how long this has been going on for, and ultimately its HMRCs decision - on how they instruct you proceed.
If they wish this fully rectified which incurs a cost for late filing of returns and perhaps any additional tax position, then I would visit this on the accountant that clearly has no understanding of the tax system as its their failure that has led to this tangle.
Let me know if I can be of any further assistance
Thanks
Sam
Sam and 2 other Tax Specialists are ready to help you
Customer: replied 1 year ago.

Thank you very much Sam. That was extremely useful.

Expert:  Sam replied 1 year ago.
Hi

You are very welcome and thank you for the accept/rating - much appreciated

Thanks

Sam

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