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How do I register a partnership?

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.

How do I register a partnership?

When you set up a business partnership you need to register with HM Revenue and Customs.

You must register all members of the partnership. A partner doesn’t need to be an actual person, for example a limited company is classed as a ‘legal person’.

Please note the rules are different if you are registering a limited liability partnership.

How much does it cost to register a partnership? 

There is no cost to register an ordinary business partnership.

Tax doesn’t need to be taxing

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What information do I need to provide?

Firstly you must provide the name of the partnership. There are certain rules that you must follow when choosing the name – you can read the HMRC guidance on naming a partnership. 

The following must also be provided:

  • the address and telephone number of the partnership (this can be a home address)
  • the trading name and trading address of the partnership might be different from the partnership name and address, if so you need to provide these details
  • you must provide information on the nature of the business, for example, plumbing, joinery, decorating services
  • you must provide the full date the business commenced or is due to commence – day/month/year
  • you must also provide the name and address of the nominated partner – this is the partner that has been nominated to receive and submit the partnership returns.

How do I update these details if they change?

If there are changes to the partnership you must inform HMRC of the following:

ChangeAction required
If a partner joins or leaves the partnershipAny 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 bankruptIf 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 addressYou 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 partnerYou 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 partnershipWhen 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.