Partnership Tax Returns

A partnership generally exists where two or more individuals work together in business with a common view to making a profit.

The arrangement is not that of an employer/employee, rather all of the individuals invest in the business and share in the overall responsibility for the business.

If the business does well, the individuals will each have a share in the profits, and equally if the business does poorly they will share the losses.

Partnerships are by law required to register with HM Revenue and Customs and to submit annual partnership returns by the normal self-assessment deadline. Failure to do so can result in penalties being imposed by the Revenue.

The individual partners are also required to register for self-assessment and to submit their annual tax returns by the normal self-assessment deadline. Failure to do so will result in additional penalties and interest being charged.

Partnership Tax Return Compliance Service:

  • Registering your partnership and individual partners with HM Revenue & Customs.
  • Reviewing your partnership agreement and offering expert advice and feedback.
  • Analysing your year-end accounts and making the relevant adjustments for tax, in line with current legislation.
  • Optimising the use of capital allowances.
  • Preparing and submitting the individual partners annual self-assessment tax returns.
  • Preparing and submitting your annual partnership tax return.
  • Calculating and advising on partner balancing payments or tax repayments and, where applicable, any payments on account due by the deadlines.
  • Allocating partnership losses in a tax-efficient manner.
  • Providing effective tax planning for current and future tax years.
  • Offering expert advice on all partnership related matters.


When are partnership tax returns due?

The UK tax year runs starts on 5 April and ends on 6 April of the following year. Partnership returns are due on the 31 January following the end of the tax year.

The partners returns are due on the same date in line with the normal rules for self-assessment

Do partnerships pay tax?

No the actual partnership does not pay tax instead, any tax payable is assessed on the individual partners, in line with their agreed profit share.

How to the partners pay tax?

The partners pay tax on their share of the partnership profits under the normal self-assessment regime.

Is it important to have partnership agreement?

Its absolutely recommended that a partnership agreement is in place. This will lay out the terms on conditions of how the partnership should be governed and will ensure that the partners have a clear understanding of how the partnership works.

The partnership agreement should cover most things including how profits and losses are to be split, the conduct of partners, admission of partners, retiring partners, ownership of assets and how to resolve disputes.

If there is a difference in opinion somewhere down the line, the partners can always refer to the partnership agreement for guidance.

Is a partnership the same as joint ownership?

No joint ownership is not sufficient create a partnership. A partnership will only exist if the individuals are actually carrying on a business with the common view to profit.

This means that the individuals must actively be involved in the day to day running of the business.

If you have any questions relating to partnerships, please request a free consultation.