Changing from sole trader to partnership in the same tax year

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My partner has run a sole trader business for a few years, however as of today we have changed it to a partnership (gone through the business banker, informed inland revenue etc).

However I am a little unsure about how our next tax return will work. Will it be I have to submit a sole trader one to todays date and then two partnership ones from today until year end (our year end being the normal tax year)? Also should I begin a new set of accounting books from today?
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Thank you for your quick response and can i clarify that, Iam right in assuming as a partnership you complete a partnership return initially and then info from this would form an individual return from each of us? thanks in advance.
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Ynonne your understanding is correct. I would be grateful if you could click thumbs up on this comment and my earlier response. Thanks Aziz
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Hi Yvonne

This is how it will work:

- Make an assumption that your profits or losses arise evenly throughout the tax year.

- Any profits arising before the partnership will be assessed on your partner. For example if taxable profits made were £12k for the tax year and partnership was formed half way through the year, then £6k of taxable profits will belong to your partner and the remaining £6k profits will be split equally between you and your partner - £3k each on the basis it is a 50:50 partnership.

- You do not need to start preparing another set of books. Make sure there is a formal partnership agreement in place.

- In terms of tax returns you will need to prepare a partnership tax return (SA800). This would show the partnership's profits and the split of these profits to the partners.

- Each partner's share of the above profits (ego £3k each) would go into your individual tax returns SA100. Your partner's tax return from example above would show £9k profits (£6k pre partnership and £3k post partnership)

I hope this helps.

Kind regards

Aziz

Always appoint a good accountant to help you: http://www.southsideaccountants.co.uk/Acct-Role.pdf

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Dear Yvonne

Just add a note here.
The tax return for the business as a whole is SA800. The tax return for individual partners is SA104.
If you have any questions, please do not hesitate to ask us anytime. We are doing special discount for tax return which is £60/tax year.

Regards
Harry Lee
SC Lee Accountant
www.scleeaccountant.com
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