The partners are then taxed on the share of the profits they’re allocated. All income received by the partnership must be shared between the partners. This then determines how much tax each partner is liable to. Then you each complete a Self Assessment tax return (SA100 form) with an additional page SA104 on which the individual’s share of the partnership income is declared. One partner is nominated to handle the partnership’s tax returns known as SA800 Partnership Tax Return. Your partnership Income Tax return uses an SA800 form to declare these finances and tell HMRC how profit has been split.Įssentially, there are two documents to bear in mind. Money passes straight to each of you, and you have to submit a Self Assessment tax return on time, just as if you were self-employed. It accounts for the income of the partnership and how this is distributed to the partners. A partnership tax return, then, is the legal responsibility of declaring the income, or losses, of the partnership. The Partnership Act 1890 defines this arrangement as two or more people ‘trading in common with a view to profit’. We’re going to run through the key pieces of information, so you know exactly how to do a partnership tax return and pay your tax. What’s the procedure? How much could you pay? And which resources should you use for accurate partnership tax returns? A partnership tax return is one such obligation. Running a business with another as a business partnership involves various responsibilities to comply with HMRC.
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