In a partnership, you and your partner (or partners) personally share responsibility for your business. This includes:
- any losses your business makes
- bills for things you buy for your business, like stock or equipment
Partners share the business’s profits, and each partner pays tax on their share.
A partner does not have to be an actual person. For example, a limited company counts as a ‘legal person’ and can also be a partner.
What you need to do
When you set up a business partnership you need to:
- choose a name
- choose a ‘nominated partner’
- register with HM Revenue and Customs (HMRC)
The ‘nominated partner’ is responsible for managing the partnership’s tax returns and keeping business records.
aming your partnership
You can trade under your own names, or you can choose another name for your business. You do not need to register your name.
You must include all the partners’ names and the business name (if you have one) on official paperwork, for example invoices and letters.
Business partnership names must not:
- include ‘limited’, ‘Ltd’, ‘limited liability partnership, ‘LLP’, ‘public limited company’ or ‘plc’
- be offensive
- be the same as an existing trade mark
Your name also cannot contain a ‘sensitive’ word or expression, or suggest a connection with government or local authorities, unless you get permission.
To use ‘Accredited’ in your company’s name, you need permission from the Department for Business, Energy and Industrial Strategy (BEIS).
Check which words you need permission to use, and who from.
You’ll need to register your name as a trade mark if you want to stop people from trading under your business name.
Register the partnership
You must register your partnership for Self Assessment with HM Revenue and Customs (HMRC) if you’re the ‘nominated partner’. This means you’re responsible for sending the partnership tax return.
The other partners need to register separately.
Register a partner or partnership
All partners also need to send their own tax returns as individuals.
You must register by 5 October in your business’s second tax year, or you could be charged a penalty.
If you started a partnership or became a partner during the 2021 to 2022 tax year, you must register before 5 October 2022.
Other ways to register
You can also register the partnership using form SA400 if you cannot register online. You can register as a partner using form SA401.
Registering for VAT
You must also register for VAT if your VAT taxable turnover is more than £85,000. You can choose to register if it’s below this, for example to reclaim VAT on business supplies.
You can appoint an agent to deal with HMRC on your behalf.