Sole-traders and old-style partnerships could become the latestile waiting for rebate. victims of the introduction of self-assessment.
According to the English ICA’s self-assessment monitoring group, partners in partnerships formed before 1994 may be caught out by a delay in rebates on partnership returns.
Such partnerships should have paid their tax by 1 July last year, but the Revenue – inundated by SA returns – has fallen behind in the processing of returns and the issuing of rebates. This means some partners could end up paying interest on their individual tax calculations, while waiting for a rebate on their partnership assessment.
The Revenue denied this will happen. ‘If we’ve got a person’s money, we’ll offset it against their liabilities,’ said a spokeswoman. ‘They won’t pay interest or surcharge.’
‘I hope it’ll work like that,’ said Richard Shooter, head of the monitoring group. ‘But the partnership returns are done on the old system, and I was under the impression the two were dealt with totally independently. All we’re saying is, they may need to be more flexible about the interest and surcharge regime because of this.’
Shooter is also concerned about sole traders who may not be able to settle their 31 January 1998 liabilities because of the burden placed on them by the transition from preceding to current year accounting. ‘If they are hit with big bills, for which they have not prepared, it could affect the viability of many businesses,’ he said.
The monitoring group has been lobbying the Revenue to be more lenient in the application of the penalties. But Shooter said the Revenue was just following orders, and any flexibility would have to come from the government.
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