Partnership Set Up

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Davidbyworth
Davidbyworth Registered Posts: 71
in Bookkeeping
Hi All
A client who in the 17/18 year was working as a sole trader. For the 18/19 year they became VAT registered and have been HMRC compliant. They also became a partner but this has not been set up yet, hence they have come to me.

Am I correct in my understanding that I need to register the new person for self assessment and then register the two of them as a partnership? I believe I have until October 2019 to register this but wish to resolve early. Once set up there will be two self assessments, one for each person.

It would be great if anyone can confirm?

Many Thanks

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  • douglasstroud
    douglasstroud Registered Posts: 295 Dedicated contributor 🦉
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    Yes register by the 5th Oct of the second year, you will need to submit a partnership tax return and each partner will need to submit their own tax returns
  • Davidbyworth
    Davidbyworth Registered Posts: 71
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    Hi

    Thanks for the reply. So does that mean that both will need to register for self assessment and also file a partnership return?
  • douglasstroud
    douglasstroud Registered Posts: 295 Dedicated contributor 🦉
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    You need to register the partnership which will then file its own tax return, all the partners will take their share of the profits from the partnership return and include on their own SA
    So for a two partner business three returns will need to be submitted
  • Davidbyworth
    Davidbyworth Registered Posts: 71
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    Great, thanks for your help.

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