Partnership tax return

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Partnership tax return; In the UK, partnerships are a common form of business structure where two or more individuals or entities come together to operate a business and share its profits and losses. Partnerships are not separate legal entities from their owners, unlike limited companies. Therefore, partners are personally responsible for the debts and obligations of the partnership.

From a tax perspective, partnerships are considered transparent entities for tax purposes. This means that the partnership itself does not pay tax on its profits. Instead, each partner is taxed individually on their share of the partnership’s profits, regardless of whether those profits are distributed or retained within the partnership.

Here are some key points regarding the taxation of partnerships in the UK:

  1. Self-assessment: Partnerships are required to register with HM Revenue & Customs (HMRC) for self-assessment. Each partner must also register for self-assessment and report their share of partnership profits on their individual tax return.
  2. Tax on profits: Partners are taxed on their share of the partnership’s profits according to their own tax rates. This includes income tax on profits derived from trading activities, as well as any other income such as interest, dividends, or capital gains.
  3. Capital gains: Partners are also subject to capital gains tax (CGT) on their share of any capital gains made by the partnership. This includes gains from the disposal of partnership assets.
  4. Losses: Partnerships can offset trading losses against other income of the same tax year, carried forward to future years, or allocated to partners for them to offset against their own income. However, there are restrictions and rules around the treatment of losses, so it’s essential to consult with a tax advisor.
  5. Partnership agreement: It’s highly advisable for partnerships to have a formal partnership agreement in place, outlining each partner’s rights, responsibilities, profit-sharing arrangements, and dispute resolution mechanisms. This agreement can also address tax matters, including how profits and losses will be allocated among partners.
  6. VAT: Partnerships may be required to register for Value Added Tax (VAT) if their taxable turnover exceeds the VAT registration threshold. VAT rules and obligations apply to partnerships similarly to other business structures.
  7. National Insurance Contributions (NICs): Partners are generally liable to pay Class 2 and Class 4 NICs on their share of partnership profits, subject to certain thresholds and exemptions.

Overall, partnerships offer flexibility and simplicity in terms of tax compliance, as they do not require separate tax filings for the entity itself. However, partners must ensure they understand their tax obligations and seek professional advice to optimize their tax position and ensure compliance with relevant tax laws and regulations.  You can find more information about Partnerships on the HMRC website here https://www.gov.uk/set-up-business-partnership

To qualify for our amazing low cost Partnership Tax Return price, you will need to use our self-assessment return service for each of the partners.

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Your partnership details

We need a few details about you and your partnership.

Information about you.

We need a few details about you, please make sure these match with the details HMRC expect, for example if you recently got married, please let us have your maiden surname unless you have already made HMRC aware of the change.

Information about your partner.

We need a few details about your partner, please make sure these match with the details HMRC expect, for example if they recently got married, please let us have their maiden surname unless they have already made HMRC aware of the change.

  • Partnership Info.
  • Your Info.
  • Partner Info.

Patnership Information

Your Details

Your Partners Details

Rebates are always affected by your earnings, expenses and other personal circumstances. When you send us information, it's important it is correct, we can make changes to your tax calculation however we may charge an additional admin fee. We are happy to complete capital gain calculations for you, however they are not included in the standard self-assessment return service. We include two sections of the self-assessment return within the standard price, additional sections where required attract an additional fee of £25 + VAT per section. Our self-assessment charges become payable when we create your tax return calculation, submission to HMRC is included without additional charge. We are of course unable to guarantee a tax refund if your expenses and earnings declared do not allow for a rebate.