Sector
Partnership accounts and returns, with every partner's position right
For general partnerships, LLPs and family businesses run by more than one person, where the partnership return and each partner's return have to agree.
What makes partnerships different
The partnership files, the partners pay
A partnership files its own return but pays no tax itself. Each partner is taxed on their share, so the allocation has to be right or every partner's return is wrong.
Profit sharing ratios, salaries to partners, interest on capital and drawings all need recording properly so the capital and current accounts balance. LLPs add Companies House accounts and the salaried member rules, which can turn a member into an employee for tax purposes.
Who we act for
Every kind of partnerships business
General partnerships
Two or more people trading together, including husband and wife businesses and family firms.
Limited liability partnerships
LLPs with Companies House filing obligations and members rather than partners.
Property partnerships
Jointly held portfolios where the split of income and expenses drives each partner's tax.
Mixed partnerships
Where a company is a member alongside individuals, and the anti avoidance rules on profit allocation apply.
What we handle
Partnership, LLP and partner filings
Partnership accounts and the SA800 return, with the partnership statement allocating profit to each partner. Individual partner Self Assessment returns prepared from the same figures, so nothing disagrees.
Capital and current account reconciliations, so each partner can see what they have put in, drawn out and are entitled to. LLP accounts under FRS 102 and confirmation statements at Companies House.
Partnership agreements reviewed with your solicitor for the tax consequences, partners admitted and retired mid year with the profit apportioned correctly, conversions to a company or LLP, and VAT and payroll where the partnership employs staff.
Packages
- Two partner trading partnership typically £99 a month
- Additional partner returns from £120 a year
- LLP accounts and confirmation statement included
- Joint Landlords £55 a month for property held jointly
Agree the split in writing
Where there is no written agreement, the Partnership Act splits profits equally regardless of what anyone contributed. Most disputes we see could have been avoided by a two page agreement at the start.
Questions
Frequently asked
Does a partnership pay tax?
No. It files a return showing the profit and how it is allocated, and each partner pays tax on their own share through Self Assessment.
What happens if a partner joins or leaves mid year?
Profit is apportioned to the periods before and after the change, and each partner is taxed on their share of the period they were a partner. It needs recording carefully at the time.
Do we need a partnership agreement?
Not legally, but without one the default statutory rules apply, including equal profit shares and the right of any partner to dissolve the partnership. We strongly recommend one.
What is the difference between a partnership and an LLP?
An LLP is a body corporate with limited liability and files accounts at Companies House. A general partnership does not file publicly but the partners are personally liable.
Are partners employed or self employed?
Partners in a general partnership are self employed. LLP members are usually self employed too, unless they fail all three salaried member conditions, in which case they are taxed as employees.
Speak to someone who knows partnerships
Book a free 30 minute call and we will tell you what matters for your business and what it would cost.
Or just pick up the phone
+44 7456 385980info@taxmesh.co.uk
