What is a Partnership?

What is a Partnership?

What is a Partnership?     A partnership, which works in a similar way to a sole trader but with 2 or more people. A written agreement should be in place between the partners and profits are usually shared between the partners according to the agreement. Though profits may be shared unequally, liabilities which may arise are shared jointly. This is something that everyone involved in the partnership, should be very clear about. Even if you only own 1% of the business you will still be responsible for 100% of the liability.     What to do when you are in a Partnership  

  • Register as a self-employed with HMRC within 3 months of your setting up
  • Pay Class 2 National Insurance contribution – HMRC will send you Class 2 National bills every quarter unless exempted due to small earnings.
  • Set up a separate business account If possible – Ask us if you need to open an account
  • Complete an individual Self-Assessment tax return. You’ll also have to fill in the partnership supplementary pages – SA104.
  • The nominated partner must also complete a Partnership Return – SA800 – showing each partner’s share of the profits or losses.
  • The nominated partner is responsible for sending in the partnership return but you’ll be jointly liable with your other partners for any penalties, surcharges, and interest if the return is late or inaccurate.
  • Both partners are personally liable to pay tax on their share of the partnership profits according to the tax band they fall in.
  • Both partners are personally liable to pay Class 4 National insurance contribution on any profits above a certain limit.
  • Register your Business for VAT if turnover is above the VAT threshold.
  • If you have employees, you should set up a PAYE system to collect income tax and National Insurance contributions.
What is a Partnership?
What is a Partnership?

Record Keeping

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We try to make things transparent for our clients by providing maximum information. If you are looking for a low cost fixed fee,  Partnership in surrounding areas, please feel free to contact us at 0800 6441 258 or email us at [email protected] –  Click here for a Quick Quote.
What is a Partnership?
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