A partnership is a way for two or more people to own and run a business together. Part of the process of setting up your business as a partnership is registering the partnership correctly. Here we give you a guide to the process of registering an ‘ordinary’ business partnership.
If there are changes to the partnership you must inform HMRC of the following:
If a partner joins or leaves the partnership
Any partner joining must register for Self Assessment. When a partner leaves they still need to submit a Self Assessment tax return for the year the leave. These changes must be recorded on the partnership tax return and each partner’s Self Assessment tax return.
If a partner dies or is made bankrupt
If there are two partners, the partnership will be automatically dissolved and the remaining partner must re-register for Self Assessement as a sole trader. If there are more than two partners, the partnership will be dissolved unless the partnership has agreed otherwise. If the nominated partner dies, the partnership must nominate another partner and tell HMRC as soon as possible. If they don’t, HMRC will nominate one and write to the partnership. That partner must then complete any outstanding partnership tax return.
Changing the name and address
You can login in online to report changes to your partnership’s name or address. You also have to report changes to the names or addresses of any of the partners.
Changing the nominated partner
You might decide to change the nominated partner this can be done as part of the partnership tax return or by writing to HMRC.
Closing your partnership
When you close a partnership the nominated partner must send a partnership tax return for the final period of trading.
Do I need to register for Self Assessment?
Each partner has to be registered with HMRC for Self Assessment. Your partnership must also be registered for Self Assessment. When the nominated partner registers the partnership they will automatically register themselves for Self Assessment.
You can register online with HRMC or download a form here.
When do I need to submit my first partnership tax return?
The nominated partner will receive a letter from HMRC in April or May telling them when to send the partnership tax return. The deadlines are usually:
online returns: 31 January following the end of the tax year (or 12 months from the partnership’s accounting date if later)
paper returns: 31 October following the end of the tax year (or 9 months from the partnership’s accounting date if later).
The nominated partner must let each partner know their share of the profits and losses so they can complete their own Self Assessment tax returns.
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