Setting up a new partnership with HMRC

bexman · 17 May 2017 at 2:31PM

Complicated situation but already work full time, PAYE.

I also have a sole trader business and complete Self Assessment for that business - I do it myself and don't use an accountant.

In 2015 I started working with another person and we decided to form a partnership. Our first paid job was in August 2015 and we've had around 4 or 5 jobs since then.

I am now registering that partnership with HMRC and intend to do a partnership tax return this year. HMRC says I must register the partnership by 5th October in the second tax year. If we started trading in August 2015, does that mean I should register the company by 5th October 2017? Or should it have been registered last October, the more I think about it the more confused I get.

Savvy_Sue · 17 May 2017 at 10:25PM

I'm sorry I can't answer your specific question, but I'm going to ask another one: do you have a legally drawn up partnership agreement?

Your tax affairs are now becoming more complicated so an accountant may pay for themselves, or at least be worth getting some initial advice. You've got three sources of income (PAYE, sole trader and partnership) to account for, and you've got to do a partnership return as well, presumably in conjunction with your partner. I'm not saying this WILL end in tears, but I'd say it has a fair chance of doing so if you don't know, absolutely certainly, what you're doing.

Pennywise · 18 May 2017 at 8:05AM

You should have prepared and submitted a partnership tax return for the year ended 5/4/16 by 31/1/17. It's therefore overdue and you'll have already incurred some late filing penalties. These penalties rise over time, so the sooner you get registered and get the late 15/16 return submitted, the better. Your personal 15/16 SA returns will also need to be adjusted to show the profit/loss from the partnership.

martindow · 18 May 2017 at 10:54AM

I'll second Sue's suggestion of using an accountant, at least temporarily, as you've missed the filing date. You're not the first to do this but a good accountant should be able to liaise with HMRC to sort it out.

bexman · 18 May 2017 at 12:03PM

Thanks for the helpful advice, it's certainly given us some things to think about.

As far as software goes, we were going to use the Andica software for Partnership returns as it's been recommended on here several times.

We'll also contact an Accountant to at least complete first returns and make contact with HMRC.

Setting up a new partnership with HMRC

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