Partnership
The Basics
If there are two or more people in your business, you may wish to operate as a Partnership. Deciding how best to set up your business is a key decision, and the tax position may need to be balanced with commercial considerations. For example, in a partnership, each partner will usually have unlimited personal liability for any business debts – this is not the case when operating through a Limited Company.
It is advisable to put a formal ‘deed of partnership’ in place to ensure the partnership runs smoothly.
Just as with a ‘sole trader’ business, Partnerships need to keep good records of income and expenses (including equipment and vehicles) to enable profits, and a balance sheet, to be calculated. Good records equal lower accountancy and tax fees!
Tax position
Every partnership must submit a partnership tax return by 31st January following the tax year-end. However, partners are responsible only for their own tax, not for their partners’ tax.
Each partner pays income tax on their share of the Partnership profits, through the Self-Assessment system, as well as Class 2 & 4 National Insurance.
Partners need specialist advice to ensure that their personal tax position is optimised.
Our service
We offer a ‘one-stop shop’ service to ensure that your partnership complies with all HM Revenue and Customs requirements, including:
- Production of partnership accounts in a suitable format
- Ensuring all possible tax reliefs and deductions are claimed
- Dealing with quarterly VAT returns (as required)
- General ongoing business, accountancy and tax advice throughout the year
- Helping to maintain good accounting records
- Personal tax returns for each partner
For clients joining us with an existing Partnership business, we would review all aspects of the current accounts and taxation position, dealing with any outstanding matters if required.
Switching accountants is very simple (see ‘Changing Accountant’ fees), just provide some basic details and we will contact your old accountant to ensure a smooth transfer to us (you don’t need to have settled any outstanding fees with your old accountant to do this).
