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Partnership Tax Services in the UK
Partnership Tax Accountants
Our experienced tax accountants provide expert partnership tax services, from filing returns to profit-sharing calculations and HMRC compliance. With our tailored approach, we reduce stress, ensure accuracy, and deliver favourable outcomes confidently.
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Tax Services for Partnerships and LLPs
Expert tax services for partnerships and LLPs ensure accurate returns, fair profit allocations, and full HMRC compliance. Our accountants provide tailored support to manage partnership tax filing, partner self-assessments, and complex tax rules efficiently. This structured approach reduces liabilities, prevents costly errors, and saves valuable time. Accessible to both new partnerships and established LLPs, our services deliver cost-effective solutions and long-term financial stability with confidence.
Why Choose Our Partnership Tax Accountants
Why choose our partnership tax accountants? We provide expert support with tax returns, profit sharing, and HMRC compliance tailored to your specific needs. Our team negotiates effectively with HMRC, ensures accurate filings, and delivers strategic planning to reduce liabilities. This structured service saves time, avoids costly mistakes, and provides peace of mind. Accessible to both traditional partnerships and LLPs, our accountants offer cost-effective solutions with long-term financial stability.
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The values we live by
Honesty guides everything we do. We believe in transparent advice, accurate reporting, and doing what’s right for our clients every time.
We live and breathe tax. Our expert team delivers up-to-date, accurate advice so clients stay compliant, efficient, and ahead of the curve.
Every client matters. We take time to listen, understand your needs, and deliver personalised tax solutions with care and attention to detail.
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Our Practice Areas
We are a team of specialist tax advisors who are delivering expert guidance on tax compliance, international tax, HMRC investigations, business structuring, capital gains, inheritance tax, corporation tax and self assessment services.
We know personal taxes can be overwhelming. With us, your returns are accurate, on time, and tailored to your unique life.
We know running a business is hard enough. Let us handle your business taxes so you can focus on growth with confidence.
We know smart planning makes a difference. Our tax strategies help you stay compliant, save more, and plan for the future.
We know living abroad brings tax challenges. Whether in or out of the UK, we make your expat taxes smooth and stress-free
We know HMRC enquiries can be daunting. Count on us for expert support and peace of mind during your tax investigation.
We know unfair tax bills cause stress. If you disagree with HMRC, we’ll guide your tax appeal with precision and confidence.
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What are partnership tax services, and why are they important?
In the UK, partnerships and limited liability partnerships (LLPs) have unique tax responsibilities. Unlike sole traders, they must file an annual partnership tax return (SA800) with HMRC, in addition to each partner filing their own Self Assessment tax return. This ensures that all partnership income and expenses are reported accurately and that profits are divided fairly among partners.
Partnership tax services encompass every aspect of this process, including registering with HMRC, preparing annual accounts, calculating taxable profits, and ensuring that each partner’s return accurately reflects their agreed-upon share. Without this support, partnerships risk missing deadlines, making calculation errors, or creating inconsistencies between returns. These mistakes can lead to HMRC penalties or even trigger an enquiry.
For example, a small family-run café with three partners must file one SA800 return to show the overall profit and then three Self Assessment returns for each partner. If one partner fails to include their share of profit on their personal return, HMRC may issue penalties to the entire partnership.
At Tax Accountant, we simplify partnership tax. We:
- Register new partnerships or LLPs with HMRC.
- File accurate SA800 returns and partner Self Assessments.
- Ensure profit and loss allocations are fair and consistent.
- Maintain your partnership’s full compliance with HMRC regulations.
How is a partnership taxed, compared to a sole trader or company?
A partnership exists between a sole trader and a limited company in terms of taxation. Unlike a company, which pays Corporation Tax, a partnership doesn’t pay tax itself. Instead, it files an SA800 return showing total income and expenses, and then allocates profits to each partner. Each partner then pays Income Tax and National Insurance contributions on their share through Self Assessment.
For example, if a partnership earns £60,000 profit with three equal partners, each will be taxed on £20,000. This is reported on their individual returns, along with any other personal income.
A sole trader is taxed in the same way but only on their own profits, with fewer compliance requirements. A limited company, on the other hand, pays Corporation Tax on profits, and directors/shareholders then pay tax separately on salaries or dividends.
Partnerships offer simplicity—avoiding the “double taxation” companies face—but they come with joint liability, meaning each partner is personally responsible for debts. LLPs protect personal assets but require more administrative work.
At Tax Accountant, we help clients weigh up these differences. We assess whether a sole trader, partnership, LLP, or limited company is the most tax-efficient and practical structure for their business.
What is the difference between a partnership and an LLP for tax purposes?
Both partnerships and LLPs involve two or more people working together and sharing profits, but there are key differences in liability and administration.
A traditional partnership:
- Partners share profits equally or according to a mutually agreed-upon arrangement.
- A partnership tax return (SA800) is filed annually.
- Each partner submits a Self Assessment return reporting their share.
- Partners are personally liable for the debts of the partnership.
An LLP (Limited Liability Partnership):
- Offers partners protection, as liability is limited to what they’ve invested.
- Must file accounts with Companies House, like a limited company.
- For tax purposes, it is still treated like a partnership: profits are shared and taxed individually (no Corporation Tax).
For example, two consultants running a firm may prefer an LLP if they want to limit their personal liability. However, LLPs require more administration and filings.
At Tax Accountant, we help clients decide whether to operate as a partnership or LLP. We explain the tax implications, manage registrations, and handle ongoing compliance with both HMRC and Companies House where needed.
How do partnership tax returns work?
Every UK partnership is required to file a partnership tax return (SA800) with HMRC annually. This return declares the partnership’s total income, expenses, and profit (or loss). While the partnership itself doesn’t pay tax, HMRC uses this information to check that each partner is reporting their correct share.
Once the partnership return is submitted, each partner files their own Self Assessment return, showing their share of profit plus any other income (such as employment, rental income, or dividends). Tax is then calculated individually, based on total income.
Example: A two-partner architecture firm makes £100,000 profit. If profits are split equally, the partnership return will show £100,000, and each partner’s Self Assessment will show £50,000. HMRC checks these returns to avoid discrepancies.
Common mistakes include late filing (which triggers an immediate £100 penalty), misreporting profit splits, or failing to complete the SA800 alongside individual returns.
At Tax Accountant, we prepare and file both the partnership return and each partner’s return. We ensure accuracy and consistency across all filings, helping you avoid HMRC queries and penalties.
How are profits and losses shared among partners?
Profit-sharing is central to how partnerships operate. Unless a partnership agreement is in place, HMRC assumes that profits (and losses) are divided equally among partners. However, most partnerships agree in writing how profits should be split—for example, based on capital contributions, time worked, or expertise.
Example: Two partners may agree that one receives 60% and the other 40% because one invested more capital. HMRC will accept this arrangement, provided it’s clear and consistently applied in both the partnership and individual Self Assessment returns.
Losses can also be shared and may be offset against a partner’s other income, reducing their personal tax bill. This is particularly useful in the early years of a business when expenses are high.
Problems often arise when agreements are vague or when partners file inconsistent figures. HMRC expects the SA800 return and partners’ Self Assessment returns to match exactly. Discrepancies can lead to enquiries or penalties.
At Tax Accountant, we help draft profit-sharing agreements, calculate allocations, and ensure returns are aligned. We also advise on tax planning opportunities, such as allocating more profit to a lower-earning partner to reduce overall tax liability.
What expenses can partnerships claim?
Partnerships can claim a wide range of allowable expenses to reduce their taxable profits. These are costs that are “wholly and exclusively” for the purpose of running the business, as defined by HMRC.
Typical expenses include:
- Premises and office costs – rent, utilities, internet, phones, and insurance.
- Staff wages and subcontractors, including employer National Insurance and pensions.
- Professional fees, such as accountants, solicitors, and business advisors.
- Travel and transport – mileage for business journeys, train fares, parking, or fuel.
- Marketing and advertising, including websites, branding, and online ads.
- Equipment, tools, and IT used in the partnership.
For example, if a partnership earns £120,000 and spends £30,000 on legitimate expenses, the taxable profit reduces to £90,000. That profit is then split between the partners, who each declare their share on their Self Assessment returns.
However, personal expenses cannot be claimed. Clothing (unless it is protective or branded), personal travel, and everyday household expenses must not be included in the partnership books. Claiming incorrectly can trigger HMRC scrutiny or penalties.
At Tax Accountant, we review all partnership expenses to make sure they’re legitimate and fully claimed. We also help set up record-keeping systems that comply with HMRC rules and Making Tax Digital requirements, ensuring that invoices, receipts, and transactions are properly captured.
Do partnerships need to register for VAT?
Partnerships must register for VAT if their taxable turnover exceeds the VAT registration threshold of £85,000 (2025/26). This includes most goods and services provided in the UK.
Once registered, the partnership must:
- Charge VAT on taxable sales.
- Submit VAT returns, typically on a quarterly basis.
- Maintain digital VAT records in accordance with Making Tax Digital (MTD) rules.
- Pay VAT to HMRC, minus any reclaimable VAT on purchases.
Even if turnover is below £85,000, some partnerships choose voluntary VAT registration. This can be useful if:
- You regularly purchase VAT-rated goods or services and want to reclaim VAT.
- Your clients are VAT-registered businesses (it avoids looking “too small”).
- You want to benefit from schemes like the Flat Rate Scheme, which can simplify VAT reporting and sometimes reduce liabilities.
Example: A design partnership with a turnover of £60,000 invests heavily in software subscriptions and IT equipment. By registering voluntarily, they reclaim VAT on these costs, improving cash flow.
At Tax Accountant, we assess whether VAT registration is right for your partnership. If so, we manage the registration process, file VAT returns, and explain the various schemes available, including the Cash Accounting and Flat Rate Scheme.
How does Capital Gains Tax (CGT) work in partnerships?
Capital Gains Tax (CGT) arises when a UK partnership sells or disposes of assets such as property, land, equipment, or investments and makes a profit. The gain is calculated by subtracting the purchase cost and allowable expenses (like legal fees or improvement costs) from the sale proceeds.
The total gain is then split between the partners according to their profit-sharing ratios. Each partner includes their share on their Self Assessment tax return and pays CGT personally, after applying their annual exempt amount (£6,000 for 2024/25, reducing to £3,000 from 2025/26).
Example: A partnership sells a business property with a gain of £100,000. If there are four equal partners, each declares £25,000. Each can use their annual CGT allowance before paying CGT at either 10% or 20% (or 18% or 24% for residential property), depending on their income.
CGT can become complex when:
- Partners have unequal profit shares.
- An asset was partly for personal use.
- Reliefs apply, such as Business Asset Disposal Relief (BADR) or Rollover Relief.
At Tax Accountant, we ensure gains are correctly calculated, split, and reported. We also advise on ways to reduce liabilities legally by using reliefs or strategic reinvestment.
What happens if HMRC investigates a partnership?
HMRC can investigate a UK partnership for several reasons, including:
- Inconsistent figures between the SA800 partnership return and partners’ Self Assessment returns.
- High or unusual expense claims.
- Late filings or repeated errors.
- Random selection.
During an enquiry, HMRC may request:
- Partnership accounts and records.
- Expense receipts and invoices.
- Partners’ bank statements and tax returns.
If discrepancies are found, penalties can apply to all partners, even if the mistake was caused by just one. For example, if one partner fails to report additional income, HMRC may penalise the entire partnership.
An investigation can be stressful and disruptive, but with expert representation, issues can often be resolved quickly. Cooperation and accurate records typically result in reduced penalties.
At Tax Accountant, we handle HMRC investigations from start to finish. We liaise with HMRC on your behalf, prepare documentation, and negotiate to minimise penalties. More importantly, we help partnerships prevent investigations by ensuring filings are accurate, consistent, and compliant.
Why choose Tax Accountant for partnership tax services?
Partnership taxation in the UK is unique—mistakes affect every partner. A late or inaccurate SA800 partnership return can result in fines for the partnership, while errors in profit allocation can trigger disputes and HMRC scrutiny. That’s why professional support is so important.
At Tax Accountant, we provide comprehensive services for both general partnerships and LLPs. This includes:
- Filing the SA800 partnership return accurately.
- Preparing Self Assessment returns for each partner.
- Advising on profit-sharing arrangements.
- Reviewing and maximising allowable expenses.
- Managing VAT registration and quarterly returns.
- Handling Capital Gains Tax calculations.
- Representing partnerships in HMRC investigations.
We also go beyond compliance by offering proactive tax planning. For example, one client—a consultancy with three partners—was losing money due to unclear profit allocations. We reviewed their agreement, introduced a tax-efficient allocation model, and resolved HMRC issues. The result was fairer profits, lower liabilities, and fewer disputes.
Choosing us means choosing clarity, savings, and peace of mind. Our approach is always tailored, so you only pay the tax you owe—nothing more.