Start a partnership and work together for mutual benefit.
In a business partnership, the business partners work together for their mutual benefit and personally share responsibility for the business. A partner doesn’t have to be an actual person, e.g. a limited company counts as a ‘legal person’ and can also be a partner in a partnership.
The partnership pays no business tax itself; instead, the partners are taxed individually on their share of the profits as if it were a sole trade.
All the partners are jointly and severally liable for the liabilities of the partnership. A limited partnership or limited liability partnership can be used if the partners do not want to be personally responsible for a business’ losses.
The partnership must be named and registered with HMRC and must also submit a partnership tax return to HMRC each year, which shows the share of the profits for each partner. These shares of the profits are then reported on each individual partner’s self assessment tax return. The partnership will also have to register for VAT if its takings exceed the registration threshold, and register a PAYE scheme if it has employees.
Tax Innovations can provide the following services to your partnership:
- Registering the partnership with HMRC.
- VAT registrations and returns.
- Payroll services.
- Tax returns.
- Self-assessment tax returns for Partners.
- Incorporation of Partnerships.
If you need tax advice for a partnership business or to book an initial consultation please call us on 01962 856 990 or visit our contact page.