forgive me if this is extremely basic?????

UK Discussion in 'General Accountancy Discussion' started by thegirlwithnoname, Mar 20, 2017.

  1. thegirlwithnoname

    thegirlwithnoname

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    I just wondered if someone could shed some light on the below question....

    I will be doing my partners tax returns for his sole trader business as an aquarium shop keeper, only I have never completed tax returns for a business with high levels of stock at the end of the year. Do I have to declare the remain unsold stock as profit even if it hasn't been sold within this year tax year?

    Thanks in advance :)
     
    thegirlwithnoname, Mar 20, 2017
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  2. thegirlwithnoname

    Fidget VIP Member

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    No. Whether it's accrual or cash accounting, It's the taxable profit/(loss) that HMRC is interested in. Obviously, the stocks will go into the calculation of taxable profit/loss, but you don't have to declare them separately.

    What your partner does have to do though, is keep proper records of the items that make up the profit/(loss) that is declared on his tax return ie receipts, invoices, bank statements etc that backs up the numbers that are in it his tax return. He'll need to produce them should HMRC query his tax return.
     
    Fidget, Mar 22, 2017
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