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A partnership has submitted tax returns for many years and each year their accountant has asked the two partners to sign off the profit shares before preparing the accounts and tax returns.
As a result the profit shares have been shown in the accounts and tax returns in the proportions of 60:40. It now transpires that the partners were let us say not really paying attention and had as a question of fact been splitting the profits 50:50. To correct this means an overall income swing over the years of about £50 000.
One approach is that we could be pragmatic and mop it up through a single amendment to profits for the 2017-18 return as the earliest year still within time under TMA 1970 s 9ZA (at the time of writing). We estimate that there is no overall loss of tax...
