Form

Partnership Tax Return Guide notes (2021)

Updated 6 April 2024

Introduction

The Partnership Tax Return asks for details of the partnership’s income and related information.

This guide has step-by-step instructions to help you fill in the Partnership Tax Return for the tax year 6 April 2020 to 5 April 2021. The notes are numbered to match the boxes in the Partnership Tax Return. Most of your questions will be answered here.

You can find more information about Self Assessment and download Self Assessment forms and related helpsheets on GOV.UK.

Key dates and summary

You must, by law, have kept all records. Failure to do so could give rise to penalties.

April 2021

You receive the Partnership Tax Return:

• check to see if you need any supplementary pages

• find your records

• fill in the tax return

• you can file your tax return online

31 October 2021

If you file a paper tax return, you must do so by this date, otherwise we’ll charge each partner an automatic penalty of £100. It will help the partners if the Partnership Tax Return is sent by this date.

31 January 2022

This date is important for 4 reasons. This is the date by which:

• we must have received the completed Partnership Tax Return if it’s filed online (we must receive paper returns by 31 October 2021)

• the partners must submit their own returns if they file online (we must receive paper returns by 31 October 2021)

• the partners must pay the balance of any tax they owe

• the partners must pay their first payment on account for the 2021 to 2022 tax year

You can file online even if we’ve sent you a paper tax return. Provided that we receive the online return by 31 January 2022, then we’ll not charge an automatic penalty. If the Partnership Tax Return is late and, as a result, the partners’ personal tax returns are also late, then automatic penalties will apply.

If tax is paid late, then we’ll charge interest and possibly a late payment penalty.

If we gave you notice to make the Partnership Tax Return after 31 July 2021

If we gave you the notice requiring you to make the Partnership Tax Return after 31 July 2021 but on or before 31 October 2021 (you may have slightly longer if the partnership includes a company as a partner), we must receive it from you by the later of either:

• 3 months from the date we gave you the notice for a paper Partnership Tax Return

• 31 January 2022 for an online Partnership Tax Return

If we gave you the notice requiring you to make the Partnership Tax Return after 31 October 2021 (you may have slightly longer if the partnership includes a company as a partner), we must receive it from you 3 months from the date we gave the notice whether you send us a paper Partnership Tax Return or an online Partnership Tax Return.

The notice requiring you to make the Partnership Tax Return is given on the day it’s delivered to you. We’ll normally assume, for example, for the purpose of charging automatic penalties for the late submission of the Partnership Tax Return, that delivery will have taken place no more than 7 days after the date of issue shown on the front of the return.

Filing dates if the partnership includes a company as a partner

If a partnership includes a company as a partner, the filing date for the Partnership Tax Return will depend on the relevant period. This is normally the period or periods to which the partnership makes up accounts and will end on the accounting dates of the partnership ending in the tax year.

The relevant period will be the same as the tax year:

• where the partnership makes up accounts to 5 April

• where there are no partnership accounts ending in the tax year

• for investment partnerships that do not carry on a trade or profession

Where a partnership (the reporting partnership) includes any member who is a partnership

If your partnership includes any member who is a partnership, to enable the members within the chain of partnerships (the indirect partners of your partnership) to complete their own tax returns, the reporting partnership must calculate that partnership’s allocation of profits and losses on the basis that each of the following assumptions apply. That the member is a:

• UK resident individual

• non-UK resident individual

• UK resident company

• non-UK resident company

The reporting partnership may instead provide the name of every indirect partner during any part of the period and the details of whether that partner was an individual, company, partnership (or something else) and or their residence status.

In that case only those calculations under (a) to (d) above relevant to those named partners need be carried out.

When completing your partnership statements, if more than one of (a) to (d) apply, complete a partnership statement for that partnership member to show one set of calculations and submit an attachment showing the profits and losses arising from the other calculations.

A copy of the partnership statement and any attachment should be provided to that partnership member.

For the exception to apply, the names and details should be provided in box 3.116 Additional information on page 3 of your Partnership Tax Return, or as an attachment to your return.

Partnerships do not have to provide calculations on either of the non-resident bases to HMRC if its income is wholly investment, the reporting partnership has no indirect non-UK resident and the partnership cannot provide all the indirect partner information required under section 12AB (1C) of the Taxes Management Act 1970.

If one or more partnership statements covering non-resident calculations are not provided, the partnership’s tax return will be regarded as reporting nil UK taxable profits on the base(s) for which statements are not provided.

This does not affect the ongoing requirements in respect of direct partners, or (where full information is not available in respect of the indirect partners) the requirements to provide partnership statements covering the calculations on both UK resident bases (as if the partnership business were carried on by a UK resident individual, and as if it were carried on by a UK resident company).

If your partnership is a member of another partnership

If your partnership is a member of another partnership, any profits or losses that you receive from that partnership must be treated as received from a separate source to your own partnership profits and losses for the purposes of completing partnership statements.

Carry out the necessary calculations of the profits and losses for your own business (see the earlier part of these notes for further details on the application of Income Tax rules, Corporation Tax rules and non-residency) and complete partnership statements for each partner to include their allocation of those profits or losses.

Also, complete additional partnership statements showing their allocation of the profits or losses from the separate source, using the relevant calculations provided by the partnership of which your partnership is a member.

Relevant periods ending on or between 6 April 2020 and 31 January 2021

The filing date for the Partnership Tax Return will be:

• 31 October 2021 for a paper Partnership Tax Return

• 31 January 2022 for an online Partnership Tax Return

Relevant periods ending on or between 1 February 2021 and 5 April 2022

The filing date for the Partnership Tax Return will be:

• 9 months from the end of the relevant period for a paper Partnership Tax Return

• the first anniversary of the end of the relevant period for an online Partnership Tax Return

You’ll always have at least 3 months from the date we give the notice to file the Partnership Tax Return.

Penalties for failing to file by the deadline

If you fail to file the Partnership Tax Return by the appropriate deadline, we’ll charge each partner who was a member of the partnership during the return period a £100 penalty.

If the delay continues, we’ll charge each partner the following penalties:

• over 3 months late — a penalty of £10 for each additional day the Partnership Tax Return is late for a maximum of 90 days (£900)

• over 6 months late — a fixed £300 penalty

• over 12 months late — a further fixed £300 penalty

You must complete the Partnership Tax Return in full. If you have a disability that makes filling in the return difficult, we’ll be able to help you complete the form. Contact us to talk about this. You can find the supplementary pages mentioned in these notes on GOV.UK.

If you decide to file your Partnership Tax Return online, the first thing you need to do is register with our online service and then purchase commercial software.

Coronavirus support scheme payments

You must include amounts of taxable coronavirus support scheme payments that the partnership received, subject to further guidance in these notes.

These include the following:

• Coronavirus Job Retention Scheme (CJRS)

• Eat Out to Help Out Scheme

• any other applicable HMRC coronavirus support scheme

• payments that the partnership was entitled to receive from local authorities or devolved administrations

There is more information about coronavirus support schemes on GOV.UK.

If exceptionally any partner was required by the partners to account for a payment received under the Self-Employment Income Support Scheme (SEISS) or any other applicable coronavirus support scheme payment to the partnership, include the amount as turnover in either box 3.24 or box 3.29. The partner’s share of the payment should be included in the partner’s share of profit (or loss).

Generally, a partner will not be required to account for a SEISS or any other applicable coronavirus support scheme payment to the partnership, so do not include the payment in this return. The partner should include the payments in the relevant boxes of their Self Assessment tax return.

If the partnership received a CJRS, Eat Out to Help Out Scheme or any other applicable HMRC coronavirus support scheme payment that it was not entitled to and it has not been voluntarily paid back to HMRC or none of the partners have received an assessment issued by an officer of HMRC in respect of the incorrectly claimed payment, put the incorrectly claimed amounts in box 3.118.

Every partnership gets the first 8 pages of the Partnership Tax Return covering income from trades and professions, and interest or alternative finance receipts from banks, building societies or deposit takers. There are other, supplementary, pages covering the less common types of income and disposals of chargeable assets.

As the partner completing the Partnership Tax Return it’s your responsibility to make sure that you fill in the right supplementary pages. You must send them to us on time with the rest of the Partnership Tax Return.

Filling in the Partnership Tax Return

The Partnership Tax Return must be filled in and signed by one of the following:

• the partner nominated by the other partners who were members of the partnership during the return period (or by us)

• the partner named on the front of the form

• the manager of a European Economic Interest Grouping (EEIG) registered in the United Kingdom (UK)

• the member to whom the Partnership Tax Return is addressed for other EEIGs

You’ll need information about the partnership’s business, including any investments.

Do not send these financial records with the Partnership Tax Return, but keep them safe.

The rest of this guide will help you to fill in the boxes in the Partnership Tax Return. If you need help, ask us or your tax adviser.

Answer all the questions. If you tick Yes, fill in any pages and boxes that apply to you. If not, go to the next question. Make sure you:

• write clearly using blue or black ink and only in the spaces provided

• only use numbers when you’re asked for amounts

• do not include pence — round down income to the nearest pound and round up tax credits and tax deductions (for example, if business income is £85,000.97, enter £85,000 in box 3.29) and round all the boxes, not just totals boxes

• complete the boxes with the information or amounts requested and do not include entries such as per attached, per enclosed accounts or to follow

• do not delay sending your tax return just because you do not have all the information you need — read the guidance for box 10.1 in these notes

If you need help, look up the question or box number in this guide. The first part of each number shows which question it relates to, for example, box 3.29 is one of the boxes for Question 3.

What we do

When we get your completed Partnership Tax Return we’ll process it using your figures.

If we see any obvious mistakes we may put them right and tell you what we’ve done. If we’re not sure about a figure that you’ve entered we may contact you. When we process the return we shall only be looking at the return and documents we’ve requested.

Once we’ve processed the Partnership Tax Return we may check it. We have 12 months after we receive it to do this. We may make enquiries about the figures and ask you to send the records from which you took them. We may also check the figures against any details received from other sources, such as your bank.

You and your partners are responsible for the accuracy of the Partnership Tax Return.

If after sending us the Partnership Tax Return you find that you’ve made a mistake, or any details have changed, then let us know at once, otherwise we may charge you a penalty. You must provide final figures to replace any provisional amounts as soon as you can.

We may also charge a penalty if there’s unreasonable delay in providing corrected figures once they’re known to you, or the Partnership Tax Return is incorrect because you’ve failed to take reasonable care.

Each partner who was a member of the partnership during the period covered by the return may face a maximum penalty ranging from 30% to 100% of the difference between the correct tax due and the amount due on the figures the partnership has provided.

This could be up to 200% if the income or gains not being declared arose outside the UK.

We can reduce these penalties, depending on what you tell us, and the help and assistance you give us to correct the error. In some circumstances you and your partners could also be prosecuted for deliberate errors.

Giving information to the partners

Make sure that you provide individual partners with the information they need to fill in their personal tax returns as quickly as possible.

The Partnership Tax Return includes a Partnership Statement on pages 6 and 7 for summarising the profits, losses, income and other amounts allocated to the partners.

There are 2 types of statement:

• a short abridged version for partnerships that have only trading or professional income, or interest or alternative finance receipts from banks, building societies or other deposit takers

• a full unabridged version SA800(PS) covering all the possible types of partnership income

Some partners may want to send their personal paper tax returns by 31 October 2021. Others will want to submit them online by 31 January 2022.

In most circumstances a copy of the Partnership Statement will be all they need to fill in the Partnership pages of their personal return. But in some circumstances you’ll need to provide them with additional information. This guide tells you when additional information is required.

The short Partnership Statement caters for up to 3 partners. The full Partnership Statement caters for up to 6 partners. If there are more partners than the Partnership Statement allows for, either photocopy page 7 before you fill it in and use the photocopies, or download additional forms on GOV.UK.

If your partnership is a member of another partnership, or if your members include another partnership, you will find more information in these notes on what calculations and partnership statements are required.

Attach the pages to the Partnership Tax Return when you send it to us.

If your partnership is an Alternative Investment Fund Manager (AIFM) and has opted to use the new mechanism for dealing with remuneration deferred under the AIFM Directive, then there’s a statutory requirement for you to provide certain information to partners making use of the mechanism.

If one or more of the partners do not agree with the profits or losses allocated to them, they have the right to refer the allocation for consideration by the Tribunal Service. If they tell you of their intention to do this, HMRC recommends you try to resolve the issue with them before any formal referral is made.

Explanation of terms used in this guidance

Accounting date

The date to which the partnership accounts are drawn up or, if you do not have accounts, the date to which you’ve provided details of your business income and expenditure.

Accounting period

The period for which the partnership accounts are drawn up or, if you do not have accounts, the period for which you’ve provided details of your income and expenditure.

Balancing charges

Withdrawal of some or all of the capital allowances previously given. They arise when fixed assets stop being used in your business.

Capital allowances

Allowances against tax for the cost of certain fixed assets.

Cash basis

A simpler way of working out your business profits or losses using income received and expenses paid.

First year allowance

A capital allowance at a rate higher than the usual writing down allowance. It’s given for the year in which an asset is acquired and is given instead of a writing down allowance.

Fixed assets

Assets such as buildings, plant and machinery, vehicles, and so on that you use in the business but do not buy and sell as part of your ordinary trading operations. For example, if the partnership carried on the business of plumbing, the van and your tools are fixed assets but your pipes and boilers are not (they’re stock). The cost of buying fixed assets is called capital expenditure.

Stock

Raw materials used in your business and goods bought for resale which you have on hand.

Trade

Any commercial operation supplying goods or services to a customer for profit is likely to be regarded as a trade. If you’re in doubt about whether you carried on a trade, profession or vocation during 2020 to 2021, ask us or your tax adviser.

Traditional accounting (accruals basis)

A way of working out your business profits or losses using generally accepted accounting practice. Include in your turnover all money when it’s earned, even if the partnership did not receive the money until later. Amounts that you’ve earned but not received by the accounting date are therefore counted as turnover.

This will include goods the partnership had delivered by the accounting date, even if the partnership had not issued a bill by then. But make sure that you do not count money the partnership received in this period that was included as turnover in an earlier period when it was earned.

Turnover

The income of your business before deducting any business expenses. Turnover is the money received by your business if you use cash basis or the total takings, fees, sales or money earned by your business if you use traditional accounting (accruals basis).

It includes receipts in cash or in kind for goods sold or work done, commission, fees receivable, tips, insurance proceeds for stock and loss of profits etc. Do not include amounts received from the sale of capital items, that’s, assets which are of lasting use to the business, such as business premises, plant, machinery and vehicles.

Work in progress

Partially manufactured stock the partnership has on hand.

What makes up the Partnership Tax Return

Every partnership is sent the first 8 pages covering some types of income. Answer all the questions.

They’ll help you to decide which boxes to fill in and whether you need any of the supplementary pages for other types of income and disposals of chargeable assets. In some circumstances you may also need additional sets of pages to return information for more than one period.

The Partnership Tax Return includes a short Partnership Statement on pages 6 and 7 for summarising the profits, losses or income allocated to the partners. Fill in this or the full unabridged Partnership Statement (available separately on the tax return forms page on GOV.UK), as appropriate, and then provide each partner with the information they need to fill in their personal tax return.

Changes in the membership of a partnership

For tax purposes, the business carried on by a partnership is regarded as continuous, despite a change in the members of the partnership, provided there’s at least one partner who is a member of both sides of the change.

You do not need to fill in a separate set of pages simply because of a change in the membership of the partnership (although you may prefer to do so).

However, you should confirm that, where a partner has only been a member of the partnership for a part of the period covered by the Partnership Tax Return this fact is correctly reflected in the partner details section and profit share information provided in the Partnership Statement.

Tax due on shares of partnership income

We’ll use the information in the Partnership Tax Return to check that the partners pay the correct tax and Class 4 National Insurance contributions due on their share of the partnership’s profits. Each partner is liable only up to the tax due on their share of the partnership profit.

We’ll usually have 12 months from the date we received the return to decide whether an enquiry is necessary to check the accuracy of the figures in the Partnership Tax Return.

Types of partnership

A partnership for the purposes of the Partnership Tax Return includes:

• a partnership governed by the Partnership Act 1890

• a limited partnership registered under the Limited Partnership Act 1907

• a limited liability partnership (LLP) registered under the Limited Liability Partnership Act 2000 unless the LLP:

• does not carry on a business with a view to profit

• is being formally wound up in which case the LLP may need to make a Corporation Tax Return

It also includes any foreign entity which is regarded as a partnership for the purposes of the UK Taxes Acts.

Partnerships can be made up of persons some of whom are liable to Income Tax and some of whom are liable to Corporation Tax. Where a partnership consists only of persons liable to Corporation Tax this is referred to as a CT Partnership. A partnership, which consists of some members who are liable to Income Tax and others to Corporation Tax, is not a CT Partnership.

Return period for partnerships other than CT Partnerships

Trading and professional income

Return details of the partnership’s trading and professional income and expenditure for the accounting period, or periods, ended on a date in the period 6 April 2020 to 5 April 2021.

If the partnership ceased during this period, return details of the partnership’s income and expenditure to the date of cessation even if the business was carried on after that time by one of the partners alone.

Savings, investments and other income

Return all taxed income for the period 6 April 2020 to 5 April 2021. If accounts are made up for any other period, apportion figures in the sets of accounts which between them cover the period 6 April 2020 to 5 April 2021 (if apportionment gives a reasonable approximation of the actual figures for that period) or provide the actual figures themselves.

Return all untaxed income by entering the untaxed income of the accounting periods ended in the period 6 April 2020 to 5 April 2021.

Foreign income

Return all foreign income which has had UK tax taken off (taxed income) for the period 6 April 2020 to 5 April 2021.

Return all foreign income which has had no UK tax taken off (untaxed income) for the accounting periods ended in the period 6 April 2020 to 5 April 2021.

UK property income

Return all UK property income for the accounting periods ended in the period 6 April 2020 to 5 April 2021.

Disposal proceeds on chargeable assets

Return details of disposal proceeds on chargeable assets for the period 6 April 2020 to 5 April 2021.

Investment partnerships

Where, exceptionally, a partnership does not carry on a trade or profession, return all income including untaxed income and income from property, for the period 6 April 2020 to 5 April 2021.

If accounts are made up for any other period, apportion figures in the sets of accounts that between them cover the period 6 April 2020 to 5 April 2021, (if apportionment gives a reasonable approximation of the actual figures for that period) or provide the actual figures themselves.

Return period for CT Partnerships

If the partnership is a CT Partnership return details for all classes of the partnership’s income and so on (both untaxed and taxed) for the partnership’s accounting period (or periods) ending on a date in the period 6 April 2020 to 5 April 2021.

Particulars to be supplied by a CT Partnership

In the case of a CT Partnership supply the same particulars, accounts and tax computations and fill in the same pages and boxes as for a partnership which has members who are individuals.

Management expenses and loan relationships and so on

Management expenses

If the partnership carries on an investment business, not amounting to a trade, and a member of the partnership is liable to Corporation Tax, the partnership will need to calculate the amount of the management expenses it has incurred and to allocate a share of those expenses (by reference to the partnership’s commercial profit-sharing arrangements for the tax return period) to the relevant partners.

Set out your computation of the partnership’s management expenses and the amount allocated to the relevant partners in box 3.116 Additional information on page 3 of the Partnership Tax Return.

Loan relationships and so on

If the partnership has any profits, losses, income or expenses from loan relationships, including exchange fluctuations, or from certain derivative contracts, and any members of the partnership are liable to Corporation Tax, each company member must calculate its own share of these amounts separately from the other profits and losses of the partnership business.

Each company must compute its share as if the whole loan and so on was owed by or to that member, and not by or to the partnership, then allocate itself a share of the overall profit or loss according to the commercial profit-sharing ratio for the relevant period. Set out amounts allocated to the company partners in box 3.116 Additional information on page 3 of the Partnership Tax Return.

Tonnage tax

If the partnership carries on a shipping business and any partner is a tonnage tax company then the partnership must fill in form CT600F on the basis that the whole partnership business is carried on by a tonnage tax company. This form must accompany the Partnership Tax Return.

A change in the residence status of a partner

Where an individual carrying on a business in a partnership wholly or partly abroad becomes or ceases to be UK resident, we treat this person as having ceased and immediately recommenced as a partner.

The partnership profit must be apportioned to and from the date of change of residence, and, for the period of non-residence, the partnership profit must be apportioned between that arising in the UK and that arising overseas — read the notes for Question 5.

See HS380 Completing Partnership Tax Returns for partners non-residence in, or domicile outside, the UK (2021) for more information.

Question 1: Did the partnership receive any rent or other income from UK property?

If you do not tick the Yes box, go to Question 2.

Fill in the Partnership UK Property pages if the partnership received income from:

• UK land and property

• furnished holiday lettings in the UK or European Economic Area

Question 2: Did the partnership have any foreign income?

If you do not tick the Yes box, go to Question 3. Fill in the Partnership Foreign pages if the partnership received any income from overseas savings and investment from the following:

• interest

• dividends

• rental income

• other income

Question 3: Did the partnership business include a trade or profession at any time between 6 April 2020 and 5 April 2021?

If you do not tick the Yes box, go to Question 4. Otherwise fill in boxes 3.1 to 3.117 as appropriate.

Question 4: Did the partnership dispose of any chargeable assets?

If you do not tick the Yes box, go to Question 5.

Fill in the Partnership Disposals of Chargeable Assets pages if the partnership disposed of any chargeable assets unless they were exempt assets.

Assets which are exempt from Capital Gains Tax include:

• motor cars

• UK government stocks and certain corporate bonds

• life assurance policies and deferred annuity contracts, unless at any time acquired for actual consideration

Question 5: During the return period has the partnership included any member who is:

• a company

• not resident in the UK

• a partner in a business controlled and managed abroad and who is not domiciled in the UK or is not ordinarily resident in the UK?

If you do not tick the Yes box, go to Question 6.

If your partnership includes any member who is a company, any share of partnership profits allocated to that member must be a share of profits calculated using Corporation Tax rules.

Similarly, any share of profits allocated to any member who is not a UK resident must be a share of profits calculated using the rules appropriate to non-residents.

For a mixed partnership, for example, a partnership whose members include individuals and companies, UK residents and non-residents, or tonnage tax companies as well as other partners, you may need 2 (or more) sets of Partnership Statements and the appropriate pages. For example, one set based on Income Tax rules and the other based on Corporation Tax rules.

Shares of profit allocated to the individuals will be allocated using the set based on Income Tax rules.

Shares of profit allocated to the companies will be allocated using the set based on Corporation Tax rules.

Rules in the Finance Act 2014 made changes to the way that mixed membership partnerships (those comprising both individual and non-individual members) calculate their profit or loss allocations for tax purposes. HMRC has published detailed guidance, including examples.

If you’re not sure about the application of these rules to your partnership then ask us or speak to your tax adviser.

Where the partnership includes a non-resident partner, generally you will need 2 sets of Partnership Statements, one of worldwide profits and one of UK profits. However, if the partnership is managed and controlled abroad, return the UK profits only (although a resident partner will need to know their share of the overseas profit).

See HMRC’s HS380 Completing Partnership Tax Returns for partners non-residence in, or domicile outside, the UK (2021) for more information.

However, it may be that, given the particular circumstances of your partnership, different sets of calculations made in this way do not, in fact, result in different figures of partnership profit. Where this is the case you need to fill in only one set of the relevant pages.

Explain in box 3.116 Additional information on page 3 of the Partnership Tax Return, why the calculation makes no difference to the overall partnership profit. If you’re completing this form on behalf of a mixed partnership, speak to your tax adviser before you do so.

Question 6: Are you completing this tax return on behalf of a European Economic Interest Grouping?

Although a European Economic Interest Grouping (EEIG) is not generally constituted as a partnership, its taxation treatment is similar. Like a partnership, an EEIG is not itself liable for UK tax on its profits, the profits are instead taxable on the members. Accordingly, the Partnership Tax Return has been prescribed for completion by a grouping and you should take references to partnerships as including groupings, and references to partners as including members of a grouping.

Where the grouping is registered in the UK, or has an establishment registered in the UK, its manager must make its tax return. Where there’s no registration in the UK of an EEIG or an EEIG establishment, the member to whom the Partnership Tax Return is addressed, should fill it in.

Filling in the Partnership Trading pages

You must fill in the Partnership Trading pages (pages 2 to 5 of the Partnership Tax Return) if, at any time in the period 6 April 2020 to 5 April 2021, the partnership carried on a trade or profession.

In some circumstances you may have to fill in more than one set of Partnership Trading pages. Read the notes on return period to identify the return period (or periods) appropriate to your partnership before attempting to fill in the Partnership Trading pages.

If the partnership carries on a farming or similar business, see HMRC’s helpsheet for farmers and market gardeners. It explains the methods of farm stock valuation that we accept.

The partnership should have records of all its business transactions. You must keep these until at least 31 January 2027 and show them to us if you’re asked to do so. See HMRC’s guidance on Business records if you are self-employed.

If the partnership had more than one trade or profession

You must fill in a set of Partnership Trading pages for each trade or profession carried on by the partnership. Either photocopy blank pages that you already have or download copies from GOV.UK.

Before you start

The business profit for any business is the difference between:

• the income of the business and

• allowable business expenses

Most smaller businesses can choose to record their business income and expenses (over the tax year) in one of the following ways:

• cash basis — record money when it actually comes in and goes out of your business

• traditional accounting (accruals basis) — record income when it’s earned and expenses when they’re incurred

Any business not eligible for cash basis must use traditional accounting (accruals basis).

You can find more information on eligibility for the cash basis in the notes for box 3.9 of this guide.

See HMRC’s How to calculate your taxable profits (2021) for more information on cash basis and who can or cannot use it.

These Partnership Trading pages will help you to work out your taxable business profit and will provide us with the information we need to process the Partnership Tax Return.

Work through the following steps for each business:

Step 1

Work out the return period for the business (see the information on Return periods earlier in this guide).

Step 2

Work out how many accounts fall within that period.

Step 3

For each set of Partnership Trading pages:

• provide business details in boxes 3.1 to 3.13

• fill in boxes 3.13A to 3.23 if capital allowances and balancing charges are to be included in boxes 3.25 and 3.24 or 3.70 and 3.68

• if your annual turnover was below £85,000 (or would have been if you had traded for a whole year), give details of income and total expenses and work out the partnership’s taxable profit in boxes 3.24 to 3.26 (except if you’re within the Managing Serious Defaulters (MSD) programme)

• if your annual turnover was between £85,000 and £15 million (or would have been if you had traded for a whole year), fill in boxes 3.27 to 3.73 (you should also register for VAT)

• if your annual turnover was more than £15 million, show the turnover, allowable expenses and net profit in boxes 3.24, 3.25 and 3.26 (also attach the partnership accounts and computations and send them with the return)

• in all cases, fill in box 3.83 or 3.84 and the other boxes on page 5 as appropriate

• if you have a balance sheet, provide information about your business assets or liabilities in boxes 3.99 to 3.115 (unless your annual turnover exceeded £15 million and you’re therefore attaching accounts and computations)

This guide uses some technical terms (such as trade) and tries to explain these terms as fully as possible. There is an explanation of the terms to help you. However, they cannot cover everything and if you’re in doubt about the correct tax treatment of a particular item, ask us or your tax adviser.

See HMRC’s factsheet on Keeping records for your tax return.

Providing details of income and expenses

For most businesses the information on the Partnership Trading pages will enable you to present a full and fair picture of your business. If there are any points needing further explanation, provide details in box 3.116 Additional information on page 3 of the Partnership Tax Return. Do not send accounts.

In some larger or more complex businesses additional information given on the Partnership Trading pages may not be enough to provide a full and fair picture of your business. You may consider the submission of further information, including perhaps accounts or supporting calculations, as necessary, for example, where:

• a large business has a substantial turnover

• a business is complex (perhaps because it’s a highly specialised trade)

• accounts or computations are required for a proper understanding of the figures

If your annual turnover was between £85,000 and £15 million (or would have been if you had traded for a whole year), you must fill in page 4 of the Partnership Tax Return as well, and page 5 as applicable. You should also register for VAT.

If your annual turnover exceeds £15 million read the section Income and expenses — annual turnover more than £15 million.

If you do not have accounts

Even if you do not have accounts prepared for your business each year, still work out your taxable profit using either the cash basis (if eligible) or traditional accounting (accruals). These notes will help. See HMRC’s helpsheet How to calculate your taxable profits (2021) for more advice on how we tax your profits, what to include as business income and what expenditure is allowable for tax.

You’ll come across the terms accounting period and accounting date in both the notes to the Partnership Tax Return and certain helpsheets. If you do not have accounts prepared for your business, use the following definitions:

• accounting period to mean the period for which you provide details of your business income and expenses

• accounting date means the date on which that period ends

If you do have accounts

Accounts are prepared for a variety of reasons and in a variety of ways and it may not be immediately obvious where to enter some of your figures in the Partnership Tax Return.

See HMRC’s Information from your accounts (Self Assessment helpsheet HS229) for practical help on filling in the Partnership Trading pages, including some examples.

In some situations you may need to combine or divide the figures to fit the standard format.

There may be more than one acceptable way of doing this. Whichever method you use, be consistent from one year to the next. If you want to explain any figures in more detail, make a note in box 3.116 Additional information on page 3 of the Partnership Tax Return.

Make sure that you transfer all the entries from your accounts, and that you include them once only. Do not bring in any amounts which are not included in your accounts unless they’re needed to calculate your taxable profit or were excluded in error from your accounts

Include any such amount, other than partners’ personal expenses, in box 3.71, and explain why the entry is necessary in box 3.116 Additional information on page 3 of the Partnership Tax Return. Also see also the section in this guide on the treatment of partners’ personal expenses

If the partnership has a single set of accounts which cover more than one business, transfer the figures to one set of Partnership Trading pages, but then deduct the income and disallow the expenses relating to any business other than the main business and include that income and expenses in a separate set of Partnership Trading pages for each of your other businesses.

Provisional figures

We would normally expect you to fill in the income and expenses section of the Partnership Trading pages with the final and correct figures of income and expenses. If, despite your best efforts, you’re unable to do so, read the section in this guide which explain the exceptional circumstances in which returns containing provisional figures may be accepted.

If you need to use one or more provisional figure, still fill in all relevant boxes in the Partnership Trading pages, including the accounts information. If it’s impossible to provide final or even provisional accounts information from which your taxable profit is to be calculated before the appropriate filing deadline for the Partnership Tax Return, provide one provisional figure for your taxable profit in box 3.83 and tick box 3.93.

We do not expect this to happen very often. It may be more common in the case of a newly-started business, the first accounting period does not end until close to, or after, the statutory filing date. By close to we mean within 3 months of the filing date.

If you’ve included any provisional figures, tick box 10.1 on page 8 of your Partnership Tax Return, and explain why you cannot provide final figures in box 3.116 Additional information on page 3 of your Partnership Tax Return. Enter a date by which you expect to be able to provide final figures.

Estimates (including valuations)

In some situations you may need to provide an estimated figure or valuation that you do not intend to amend at a later date. If so, read the section on estimates in this guide.

Partnership and business details

Provide details of the partnership’s income and expenses for the accounting periods ended in the period 6 April 2020 to 5 April 2021.

If the partnership had more than one account ended in 2020 to 2021

You may need to fill in a set of Partnership Trading pages for each period of account.

Always fill in an additional set of pages if the reason for the additional accounting period is a change in the partnership’s annual accounting date. Either photocopy blank pages that you already have or download additional copies.

Where the annual accounting date is unchanged the accounting periods, when added together, will cover a normal 12-month period. In these circumstances you may, if you want, fill in a single set of pages for that 12-month period by combining the accounts information required at boxes 3.24 to 3.26 or boxes 3.27 to 3.73. Otherwise, fill in a separate set of pages for each accounting period.

If the partnership is a subcontractor in the construction industry and you have to fill in more than one set of Partnership Trading pages, make sure that you fill in box 3.97 (for CIS deductions) on the pages for the most recent set of accounts.

If no accounts end in 2020 to 2021

Make sure that there’s at least one accounting period ending in 2020 to 2021. If you do not, the partners may have to use estimates to calculate their tax liability for 2020 to 2021 and could end up being charged interest if the estimates are too low.

If no accounts end in 2020 to 2021 then:

• provide details of the partnership’s income and expenses for the period 6 April 2020 to 5 April 2021

• enter 6 April 2020 to 5 April 2021 in boxes 3.4 and 3.5

Changing between self-employment and partnership

If, during the year ended 5 April 2021 a trade or profession carried on in partnership which was previously or is subsequently carried on by one of the members of the partnership as a sole trader, fill in boxes 3.24 to 3.26 or boxes 3.13A to 3.23 and boxes 3.27 to 3.73, boxes 3.82 to 3.117, as appropriate, in this Partnership Tax Return for any period of account ending in the year to 5 April 2021 during any part of which the business was carried on in partnership. This will enable you to make the allocation of partnership profits or losses in the Partnership Statement.

As well as completing a set of Partnership Trading pages for the accounting period ended in 2020 to 2021, you should also fill in a set of Partnership Trading pages for the accounting period ended in 2021 to 2022 which covers both the period to the date the partnership ceased and the period thereafter when the business was carried on by a sole trader if:

• the partnership stopped between the accounting date in 2020 to 2021 and:

• one of the members of the partnership carried on the business thereafter as a sole trader

• accounts covering the period up to the date the partnership ceased were drawn up to a date after 5 April 2021

For any accounting periods ended in 2020 to 2021 during which this business was carried on exclusively by a sole trader, fill in boxes 9 to 30 on the Self-employment (short) pages (or boxes 15 to 65 and boxes 83 to 99 of the Self-employment (full) pages) of that person’s tax return.

Where the partnership’s business was previously or is subsequently carried on by one of the partners on their own, enter the date of the change in box 3.7 or box 3.8 of the Partnership Tax Return, as appropriate.

How to fill in the pages

Box 3.2

Make sure that you fill in this box for each set of Partnership Trading pages that you need to submit.

Boxes 3.4 and 3.5

Enter the details of the period to which the information at boxes 3.24 to 3.26, or alternatively boxes 3.27 to 3.73, will relate.

Box 3.7

If the partnership trade or profession started after 5 April 2020, enter the start date. See HMRC’s HS222 How to calculate your taxable profits (2021) for more information about what to do if your accounting date has changed since then.

Box 3.8

If the partnership trade or profession was sold or closed down before 6 April 2021, enter the date it ended in box 3.8. If this is not the same as the date in box 3.5, you must fill in another set of Partnership Trading pages to show the trading results for the remaining period.

Box 3.9

Tick box 3.9 if the partnership trade or profession used the cash basis to calculate its income and expenses.

Cash basis is a simpler way of working out your business profits or losses. You add up all the income received and take off any allowable expenses paid in the accounting period. You do not include money the partnership owes or that’s owed to the partnership at the end of year date.

You can use, or may already be using, cash basis if the partnership business income does not exceed £150,000.

Most business partnerships can use cash basis if their total income makes them eligible. If you’re a partner in a partnership that you control and you have separate trading activities, you’ll need to add together the receipts from all your businesses to those of the partnership to find out if you can use cash basis. If you use cash basis for one of your businesses you must use it for all of them.

Limited liability partnerships and the following specific types of businesses cannot use cash basis for:

• partnerships with one or more corporate partners

• Lloyd’s underwriters

• farming businesses with a current herd basis election

• farming and creative businesses with a section 221 of the Income Tax (Trading and Other Income) Act 2005 profit averaging election

• businesses that have claimed Business Premises Renovation Allowance

• businesses that carry on a mineral extraction trade

• businesses that have claimed Research and Development Allowance

If the partnership uses cash basis:

• only record income when it’s received

• record expenses when they’re paid

• capital expenditure is allowed as a deduction, unless the expenditure is specifically disallowed

• any losses cannot be set off against other income

• the partnership cannot use capital allowances (read notes to boxes 3.13A to 3.23 of this guide) for anything except cars

See HMRC’s HS222 How to calculate your taxable profits (2021) for more information about cash basis.

Box 3.10

Tick box 3.10 if the partnership has succeeded to a business previously carried on by a sole trader and that person has included the accounts information in their tax return (read the information about Changing between self-employment and partnership in this guide). If you tick box 3.10 you do not need to fill in boxes 3.14 to 3.93 and boxes 3.99 to 3.115.

Box 3.11

Tick box 3.11 if the partnership’s accounts do not cover the period from the last accounting date or if no accounts end in 2020 to 2021. Explain why in box 3.116 Additional information on page 3 of the Partnership Tax Return.

Boxes 3.12 and 3.13

There are special rules where a partnership changes its accounting date. Tick box 3.12 if your accounting date has changed and this is a permanent change which you wish to count for tax. Tick box 3.13 (as well as box 3.12) if this is the second or further change in the partnership’s accounting date since 5 April 2009 and explain why this change has been made in box 3.116 Additional information on page 3 of the Partnership Tax Return.

See HMRC’s HS222 How to calculate your taxable profits (2021) for more information about the special rules.

Partners’ personal expenses

In some types of partnership, for example medical practices, partners will often incur expenditure personally, while carrying on the trade or profession on behalf of the partnership. For example, motoring expenses or rental costs. Because these sums are not directly reimbursed from partnership funds they do not appear in the partnership accounts. But the partnership agreement will provide that the profit-sharing arrangement should take into account these personal expenses.

If relief is to be given for any expenses incurred under this type of agreement, you must include the expenses in the relevant entries made in box 3.25 or boxes 3.51 to 3.63 where necessary by aggregation with similar expenditure met from partnership funds.

It will not be possible for an individual partner to claim relief for the expenditure in their personal tax return. But you can make sure that the partner receives the benefit due under the partnership agreement by making a fixed adjustment when allocating shares of profit (see the section on How to allocate profit to the partners in these notes).

Similarly, capital allowances may be due on an asset which is owned by a partner but which is used in the partnership trade or profession (unless the asset is leased to the partnership).

Again, you must include these allowances in the entries made in boxes 3.13A to 3.23 and reflect them in boxes 3.24 and 3.25 or boxes 3.68 and 3.70. You may also need to make corresponding adjustments to the entries in boxes 3.112 to 3.114 — see the section on Summary of balance sheet for this accounting period in these notes.

Expenses example

Dr Robert is a member of a partnership carrying on business as medical practitioners. He incurs the following expenses when conducting the partnership’s business:

• use of home as office: £1,000

• motor expenses: £2,000

Also, a capital allowance of £750 is due on a car which he owns but which he uses for the business.

Include the figure of £1,000 in box 3.52; £2,000 in box 3.55 and £750 in box 3.14 or box 3.70.

Make a corresponding fixed adjustment (minus £3,750) when allocating profit for Dr Robert.

Tax allowances for vehicles, equipment and buildings (capital allowances)

See HMRC’s Helpsheet on Capital allowances and balancing charges 2021.

Boxes 3.13A to 3.23, boxes 3.68 and 3.70

In working out the partnership’s taxable profits do not deduct:

• the cost of buying, altering or improving fixed assets

• depreciation or any losses which arise when the partnership sells them

Instead, the partnership can claim tax allowances called capital allowances. Deduct these in working out the partnership’s profits and include the total in box 3.70 (or box 3.25).

Do not claim capital allowances if using cash basis. The only exception for those using the cash basis is cars. In such circumstances, a partnership may claim capital allowances on cars, or alternatively may use simplified expenses.

If the partnership has previously claimed capital allowances for a car used in its business, do not use simplified expenses. The partnership may continue to claim the allowance and any business part of the actual running costs as a business expense in box 3.55. You cannot use flat rates.

An adjustment, known as a balancing charge, may arise when the partnership sells an item, gives it away or stops using it in its business. Add these to the partnership’s profits by including them in box 3.68 (or box 3.24). Fill in a separate series of boxes 3.13A to 3.23 for each set of Partnership Trading pages completed. Separate capital allowances calculations are needed for each of the partnership’s accounting periods.

Fixtures

Under rules introduced in 2012 and 2014, a purchaser of a second-hand business property containing fixtures (such as kitchen fittings, electrical or heating systems) will not usually be entitled to claim allowances unless the past owner has pooled its qualifying expenditure and has fixed the value of the fixtures.

Pooling includes making a claim for first year allowance or annual investment allowance for the expenditure. It is not necessary for the last owner to claim writing down allowances. As a rule, the past owner is the last person who was entitled to claim capital allowances on fixtures.

Normally, the value will be fixed by means of a joint section 198 of the Capital Allowances Act 2001 election, which must be notified to HMRC within 2 years of the property transaction. The amount the seller can bring in to any pool as the disposal value will be the same amount as the amount the buyer can bring in as the acquisition value for capital allowances purposes.

Box 3.13A

AIA can be claimed for the purchase of equipment (but not cars) up to a maximum annual amount of £1 million. If the equipment is used for both business and private use, reduce the AIA claimed by the private use proportion.

There is more information about AIA in HMRC’s Claim capital allowances and AIA transitional arrangements in Annual investment allowance: limit changes during accounting periods.

Box 3.14

Claim the full cost of new, not second hand, zero-emission goods vehicles in box 3.14. If you use the vehicle for non-business purposes, for example 50% of the time, you must reduce the amount of the claim by 50%.

Box 3.14A

You can claim 18% writing down allowance (WDA) on the balance of expenditure on equipment in the main pool and any unrelieved amount is carried forward to your next period.

Such expenditure includes cars bought between 6 April 2018 and 5 April 2021 with CO2 emissions between 50 grams per kilometre and 110 grams per kilometre.

See HMRC’s guidance Capital allowances and balancing charges (Self Assessment helpsheet HS252) for information on how to calculate a capital allowances pool balance. You can claim 18% WDA on the final balance. If the final balance of qualifying expenditure before you claim WDA, is £1,000 or less, you can claim the small pools allowance of up to the whole amount, instead of the 18% WDA, using box 3.14A.

Box 3.16

You can claim 6% WDA a year on the balance of expenditure in the special rate pool. Such expenditure includes:

• cars bought between 6 April 2018 and 5 April 2021 with CO2 emissions of more than 110 grams per kilometre

• integral features of a building or structure, such as electrical and water systems, lighting, lifts and escalators

• insulation that you added to an existing building

• assets or equipment with a life expectancy of more than 25 years from when they were new

See HMRC’s guidance Claim capital allowances for more information on CO2 emissions. You may also want to read Capital allowances and balancing charges (Self Assessment helpsheet HS252).

If the final balance of qualifying expenditure in the special rate pool, before you claim WDA, is £1,000 or less, you can claim a small pools allowance of up to the whole amount, instead of the 6% WDA, using box 3.16.

How to calculate a capital allowances pool balance

Start with the unrelieved expenditure in the pool at the end of the previous chargeable period.

Add the balance of qualifying expenditure for which a claim to First Year Allowance (FYA) was made in the previous chargeable period. Add all qualifying expenditure for the pool incurred in this chargeable period, except for expenditure for which a claim to FYA is made. Deduct the claim made to AIA.

Deduct the total of all disposal values (usually receipts) for assets no longer used in the business. The result is the pool’s balance of qualifying expenditure.

You can use your AIA wholly or partly against main pool and special rate pool expenditure (not cars).

See HMRC’s Capital allowances: detailed information for help with capital allowances and balancing charges.

Box 3.18

You can claim 100% first year capital allowances for expenditure invested in the acquisition and installation of new and unused electric charge-points for electric vehicles. Put the amount of expenditure incurred in box 3.18.

Box 3.18A

If the partnership is eligible to claim the Structures and Buildings Allowance (SBA), put the amount of the claim in box 3.18A. If claiming for the first time in respect of an amount of qualifying expenditure, use box 3.116 Additional information on page 3 of the Partnership Tax Return to record the:

• date the building first came into qualifying use or if later, the date the qualifying expenditure was incurred

• total amount of qualifying expenditure incurred

There is information on if and how much you can claim in HMRC’s guidance Claiming capital allowances for structures and buildings

Box 3.20

You can claim 100% capital allowances for:

• certain energy-saving or water-efficient equipment used in your business

• a new, unused car bought on or after 1 April 2021 with CO2 emissions of 0 grams per kilometre or electric

• a new, unused car bought between 1 April 2018 and 31 March 2021 with CO2 emissions of not more than 50 grams per kilometre equipment for refuelling vehicles with natural gas, biogas or hydrogen fuel

See HMRC’s guidance on claiming capital allowances to check if, and how much, you can claim.

Business Premises Renovation Allowance

Business Premises Renovation Allowance (BPRA) ended on 5 April 2017. Put any BPRA claims for expenditure incurred before 6 April 2017 in box 3.20 and any BPRA balancing events in box 3.21. See HMRC’s guidance on BPRA for more information.

Balancing charge on sales of assets or on the cessation of business use

Balancing charges arise following a disposal or balancing event, such as the sale, loss or destruction of assets or on the cessation of business use, where the proceeds from the event are more than their tax value.

This includes where BPRA has been claimed. If you sell an item you have claimed capital allowances on, and the sale proceeds or value of the item is more than the pool value or cost, you will have to pay tax on the difference (a balancing charge).

This includes items where the pool value is nil because you claimed all of the cost previously.

If the partnership has a tax adviser, ask how to calculate capital allowances and balancing charges.

If the partnership does not have a tax adviser, or you want to check your calculation, see HMRC’s guidance Capital allowances: detailed information.

Income and expenses — annual turnover below £85,000

If the annual turnover (including coronavirus support scheme payments but excluding any balancing charges) is below £85,000 for a full year, you may fill in boxes 3.24 to 3.26 on page 3 of the Partnership Tax Return instead of boxes 3.27 to 3.73 on page 4 (except if you’re within the MSD programme).

If the turnover was for a period of less than 12 months, reduce the figure of £85,000 proportionately. For example, if the partnership only traded for 6 months you must fill in boxes 3.27 to 3.73 if the turnover was more than:

• 6 over 12 multiplied by £85,000 equals £42,500

But you must fill in one section or the other, and fill in boxes 3.15 to 3.23 if you have any balancing charges, and boxes 3.13A to 3.22 if you are claiming capital allowances.

Box 3.24

Enter your business income in box 3.24. If you are using traditional accounting, you’ll also need to include the normal selling price of all goods which the partners have taken out of the business for their personal use or for their families or friends minus any sum paid into the business for the goods taken out.

This is because any sum paid into the business should already be included in the turnover figure, like other sales. If you’re using the cash basis, you do not need to include the normal selling price but include the disallowable amount (normally the cost of the goods taken out).

Include any balancing charges (from box 3.23).

Coronavirus support scheme payments are taxable and include payments from the CJRS, Eat Out to Help Out Scheme and any other applicable HMRC coronavirus support scheme and payments the partnership was entitled to receive from local authorities or devolved administrations.

If the partnership received coronavirus support scheme payments, include in box 3.24 the amount the partnership received.

If any of the partners received an assessment issued by an officer of HMRC in respect of a coronavirus support scheme payment incorrectly claimed only include in box 3.24 the amount the partnership retained. Do not include in box 3.24 the amount of any sum that has been assessed which results in the repayment of coronavirus support scheme payments that the partnership was not entitled to.

If the partnership received Eat Out to Help Out Scheme payments and are VAT registered, exclude VAT from the amount you include in box 3.24.

If the partnership received a CJRS, Eat Out to Help Out Scheme or any other applicable HMRC coronavirus support scheme payment that it was not entitled to and it has not been voluntarily paid back to HMRC or none of the partners have received an assessment issued by an officer of HMRC in respect of the incorrectly claimed payment, put the incorrectly claimed amount in box 3.118.

If exceptionally any partner was required by the partners to account for a payment received under the SEISS or other applicable coronavirus support scheme payment to the partnership, include that amount as turnover in this box. The partner’s share of that payment should be included in the partner’s share of profit (or loss).

If any of the partners received one or more loans from a disguised remuneration scheme before 6 April 2017, include the amount of loan chargeable as partnership profits in the 2020 to 2021 tax year. Ignore any loan repayments made on or after 5 December 2016 that were not repaid in money. Disregard any loan repayments made after 5 April 2019.

Do not include any loans for which full and final settlement has been reached with HMRC. See HMRC’s guidance on the disguised remuneration loan charge and when it should be reported in your tax return for more information.

Box 3.25

Enter your allowable business expenses in box 3.25. Include wages funded by payments under the CJRS. Make sure that you do not include in your expenses any items which are not allowable against tax (the table of disallowable expenses in this guide will help you to decide).

From 2013 to 2014, partnerships (other than partnerships with one or more corporate partners) may opt to use flat rates instead of working out their actual business expenses for certain types of business expenditure — read the notes on simplified in this guide for more information.

Include any capital allowances (from box 3.22).

Box 3.26

Subtract the figure in box 3.25 from the figure in box 3.24 and put the result in box 3.26 (put a loss in brackets).

Income and expenses — annual turnover between £85,000 and £15 million

If the annual turnover (including coronavirus support scheme payments) was between £85,000 and £15 million (or would have been if you had traded for a whole year), you must fill in boxes 3.27 to 3.73 on page 4. You must also fill in page 5 as applicable, any relevant supplementary pages and a Partnership Statement.

Income and expenses — annual turnover more than £15 million

If the combined annualised turnover (including coronavirus support scheme payments) from all of your activities was more than £15 million, fill in boxes 3.13A to 3.23 and boxes 3.24 to 3.26 instead of page 4, and send the partnership accounts and computations with the Partnership Tax Return. You must also fill in page 5 as applicable, any relevant supplementary pages and a Partnership Statement.

If the partnership has been told that they’re within the MSD programme, fill in all applicable boxes from box 3.27 through to box 3.117, and not boxes 3.24 to 3.26. If the partnership has been told that they’re the subject of the additional reporting requirements, you must also send the detailed partnership accounts, balance sheet and computations with the Partnership Tax Return.

These should identify and explain the nature and amount of any figures contained in those accounts that cannot be vouched by physical or electronic records made at the time that the underlying transactions took place, or written confirmation that no such figures are included. In all cases fill in box 3.83 or box 3.84 on page 5 and other applicable boxes on page 5.

VAT

Boxes 3.27 and 3.28

If the partnership is not registered for VAT, your sales figure will not include any VAT. Expenses in boxes 3.30 to 3.64 should include VAT. Do not tick either box 3.27 or box 3.28.

If the partnership is registered for the VAT Agricultural Flat Rate Scheme, include any flat rate additions charged to customers in the sales figure. Expenses should include VAT. Do not tick either box 3.27 or box 3.28.

If the partnership is registered for VAT and is not within the Flat Rate Scheme (see below), you may enter details of your business income and allowable expenses either all net of VAT or all inclusive of VAT. If the partnership is VAT registered and using cash basis, details of the income and expenses would typically include VAT.

Where the partnership adopts the latter approach, include either the net VAT payment to us as an expense in box 3.63 or any net VAT repayment it receives from us as a taxable receipt in box 3.50.

Where an item is not deductible as an expense for income tax purposes but the VAT is recoverable, add the recoverable VAT to the expense reported in box 3.63, or deduct it from the VAT repayment reported in box 3.50 and add a note in box 3.116 Additional information on page 3 of the Partnership Tax Return.

Do not include recoverable VAT when working out Capital Allowances on qualifying capital expenditure.

Add the recoverable VAT that’s excluded from the capital allowances computation to the expense reported in box 3.63, or deduct it from the VAT repayment in box 3.50 and add a note in box 3.116 Additional information on page 3 of the Partnership Tax Return.

Tick either box 3.27 or box 3.28 to show whether entries in boxes 3.29 to 3.64 include or exclude VAT.

If the partnership registered for VAT during the period, the expenses up to that date should include VAT regardless of whether later sales and expenses are recorded VAT inclusive or exclusive.

Tick box 3.27 and include the following details in box 3.116 Additional information on page 3 of the Partnership Tax Return:

• a note that the partnership registered for VAT during the period

• the date of registration

• whether sales and expenses from the registration date are VAT inclusive or exclusive

If the partnership is registered for VAT and the goods you supply are zero-rated (so that your sales figure does not include any VAT), tick either box 3.27 or box 3.28 to show whether entries in boxes 3.30 to 3.64 include or exclude VAT.

Similar action is required if the VAT registration was cancelled during the period, except that the details to appear in box 3.116 Additional information on page 3 of the Partnership Tax Return should include the date of deregistration and whether sales and expenses before that date are VAT inclusive or exclusive. Expenses from the deregistration date should include VAT.

If the partnership is registered for the VAT Flat Rate Scheme you may enter details of your business income and allowable expenses either:

• all net of VAT (that is, with the VAT figure taken off) — method 1

• all inclusive of VAT — method 2

If you use method 1, include:

• at box 3.50 any balance on your VAT account that is not paid over to us (that’s, the amount of VAT on your income which exceeds the VAT that you’ve paid on your expenses plus the payment under the Flat Rate Scheme)

• at box 3.63 any balance on your VAT account that you cannot recover from us (that’s, the VAT on your expenses plus the payment under the Flat Rate Scheme minus the VAT on your income)

If you use method 2, include the net payment to us under the Flat Rate Scheme as an expense at box 3.63.

Tick either box 3.27 or box 3.28 to show whether the entries in boxes 3.29 to 3.64 include or exclude VAT.

If the partnership is registered for VAT but we treat it as partly exempt, for the purposes of calculating the taxable profits, business expenditure includes any input tax which is not claimable.

Where you fill in boxes 3.29 to 3.64 on a VAT inclusive basis the inclusion of your net payment to, or net repayment from, us in boxes 3.63 and 3.50 respectively will reflect this. However, if you fill in the boxes on a VAT exclusive basis make sure that the figures of expenses you enter include any relevant input tax not claimed for VAT purposes.

The computation of the net payment to, or repayment from, us may have included VAT on capital items purchased during the year. For example, on assets or rights which are of lasting use to the business and which are not bought or sold as part of the ordinary trading operations. Examples might include business premises, plant, machinery, vehicles and trade rights.

If you enter details of your income and expenses inclusive of VAT, make a note of the VAT on those capital items in box 3.116 Additional information on page 3 of the Partnership Tax Return. Include the amount of VAT that you’ve paid on the capital items in the calculations of capital allowances summarised at boxes 3.13A to 3.23.

If you’re in any doubt about the correct treatment of VAT, contact us or your tax adviser.

Sales and business income (turnover)

Box 3.29

Enter the amount of your business income in box 3.29. If it includes income from which tax has been taken off, enter in box 3.97 or box 3.117, as appropriate, the total tax taken off between 6 April 2020 and 5 April 2021.

If exceptionally any partner was required by the partners to account for a payment received under the SEISS or other applicable coronavirus support scheme payment to the partnership, include that amount as turnover in this box. The partner’s share of that payment should be included in the partner’s share of profit (or loss).

Business expenses

Boxes 3.30 to 3.63

Include all your business expenses in boxes 3.46 to 3.48 and boxes 3.51 to 3.63.

You can only claim for expenses which are incurred wholly and exclusively for business purposes. Some of the amounts you put in boxes 3.46 to 3.63 may not be allowable for tax.

As you enter them, put any disallowable amounts in boxes 3.30 to 3.45. Enter in box 3.66 the total of these disallowable amounts.

From 2013 to 2014, partnerships (other than partnerships with one or more corporate partners) may opt to use flat rates instead of working out their actual business expenses for certain types of business expenditure — read the section in these notes on Simplified expenses for more information.

Table of disallowable expenses

Box	Disallowable expenses
3.30	Fuel expenses attributable to non-business use of vehicles
3.31	Any payments made relating to non-business work
3.32	Depreciation of fixed plant
3.33	Employment costs that are not paid within 9 months of the end of the period of account, or any payments made for non-business work
3.34	Non-business part of premises costs used partly for business. Costs of acquiring premises
3.35	Cost of repairs of non-business parts of premises and equipment used partly for business. Costs of alteration, improvements or replacements to business premises
3.36	Partners’ private and personal expenses. Non-business part of costs used partly for business, payments to political parties. Most payments to clubs, charities or churches. The partners’ insurance
3.37	Non-business motoring. Travel between home and business. Costs of buying vehicles. parking and other fines
3.38	Meals (except the reasonable cost of meals on overnight business trips)
3.39	Entertaining and hospitality (except gifts of up to £50 a person a year advertising your business and are neither food nor drink, and the costs of entertaining staff)
3.40	Costs of settling tax disputes, legal costs of buying fixed assets (these are treated as part of the cost of the fixed asset). Costs and fines or penalties for breaking the law
3.41	General bad debts reserve. Debts that were not taxed when they arose, for example, because they relate to a sale of a fixed asset. Not relevant if your business is using the cash basis
3.42	Repayment of the loan, alternative finance arrangement or overdraft. In addition, if your business is using the cash basis, the maximum allowable amount for interest on the loan is £500 — disallow any amounts in excess of this
3.43	Repayment of the loan, alternative finance arrangement or overdraft
3.44	Generally, depreciation and losses on assets are not allowable for tax, and profits on assets are not taxable receipts. Cancel any figure in box 3.62 by putting the same figure in box 3.44. However, to the extent that any of these items are attributable to assets held under finance leases, a different treatment may be appropriate. If you’re in any doubt about the correct treatment, ask us or your tax adviser
3.45	The non-business part of expenses in box 3.63. Ordinary, everyday clothing even if bought specially for business use

Table of total expenses

Box	Total expenses
3.46	If the business involves the resale or consumption of raw materials, enter here the cost of the goods used; that’s, purchases plus opening stock and work-in-progress minus closing stock and work-in-progress. So, for example, subcontractors in the construction industry need to include the cost of any materials supplied. And taxi drivers, minicab drivers and so on, and those in the road haulage industry need to enter fuel expenditure in this box rather than elsewhere, unless they’re claiming mileage rate. If the business is using the cash basis, include the cost of expenses when they’re paid for. It’s not necessary to calculate opening and closing stock and work-in-progress to calculate your expenses when using the cash basis. Businesses providing services commonly adjust their business profits to reflect work-in-progress at the start and end of the period of account. If an adjustment of this sort is appropriate (it will not be if you’re using the cash basis) make it here, otherwise leave the box blank. If the figure is negative, enter it in brackets.
3.47	Include all payments to subcontractors in the construction industry. Enter the gross amount before deduction if any payments have been made to subcontractors paid under deduction.
3.48	Expenses deducted to arrive at gross profit, for example, discounts allowed, commissions payable, carriage and, in manufacturing businesses, the costs of producing goods sold such as direct labour costs, depreciation of fixed plant, machine hire, small tools and consumables. If the business provides services, it may incur rechargeable expenses, which are deducted to arrive at a figure of gross profit.
3.51	Salaries, wages, (include wages funded by payments under the CJRS), bonuses, pensions, benefits, employer’s National Insurance contributions and so on for permanent, temporary and casual employees, and other staff-related costs such as canteen expenses and recruitment agency fees and so on. Any subcontract labour costs, including locum fees, not included elsewhere, include them here. Do not include the partner’s employment costs (for example, salaries, drawings, pension payments and other benefits or National Insurance contributions).
3.52	Rent, business rates, water rates, light, heat, power, property insurance, security and other similar expenses. If accounts contain an amount for use of home, include that figure here.
3.53	Repairs and general maintenance of business premises and machinery.
3.54	Phone, fax, postage, stationery and printing costs, courier services, general office expenses, the costs of trade or professional journals and subscriptions and costs of insurance not included elsewhere and other similar recurring costs which arise in running the business.
3.55	Insurance, servicing, repairs, vehicle licence, petrol or diesel hire and leasing charges, parking charges, motoring organisation membership.
3.56	All travel costs other than those included in motor expenses, such as rail, air and taxi fares, together with hotel accommodation costs and subsistence or similar costs.
3.57	The ordinary day-to-day costs of advertising and promoting the business goods or services, such as newspaper advertisements, mailshots and the distribution of free samples of the goods dealt in. Also include entertainment costs here.
3.58	Accountant’s, solicitor’s, surveyor’s, architect’s, stocktaker’s and other similar costs, together with professional indemnity insurance premiums and the like.
3.59	The amount of money owed to the partnership for goods sold or work done that has been included in turnover but remains unpaid at the accounting date and which you consider you’ll never receive. If, unexpectedly, you do recover the amount in a later year, make sure that you include it in box 3.50 in that later year’s Partnership Tax Return. This will not apply if you’re using the cash basis.
3.60	Interest on bank and other loans (including overdrafts) and alternative finance payments. If you’re using the cash basis, the maximum amount you can enter here is £500.
3.61	Bank charges, credit card charges, hire purchase interest, and leasing payments, alternative finance payments, together with other similar costs not included elsewhere.
3.62	Add together depreciation and losses on sales of assets, and deduct profits on sales of assets that are included in your accounts and enter the resulting figure in the box. Where the profit on disposal of an asset exceeds the total of any losses on disposal and depreciation added together, show this figure in brackets. A figure in brackets is to be deducted when you add up your total expenses. If you sold assets at a profit, consider whether you need to enter a disposal in the Partnership Disposal of Chargeable Assets pages.
3.63	Add up all the expenses not included elsewhere and enter the total figure.

The disallowable amounts may be expenses which are not allowable at all for tax (such as entertainment expenses and depreciation of fixed assets) or the disallowable part of expenses (such as motor expenses, if the vehicle is used for private as well as business mileage).

If any of the amounts in boxes 3.46 to 3.48 and boxes 3.51 to 3.63 are recoverable under an insurance, include these amounts in the disallowable expenses to be entered in boxes 3.30 to 3.45. However, there’s no need to do this if you’ve included that insurance recovery in turnover (box 3.29) or under other income (box 3.50).

Simplified expenses

From 2013 to 2014, you may use a scheme of simplified expenses for calculating certain types of business expenditure. You do not have to use simplified expenses. You can decide if it suits the partnership business. You do not have to be using the cash basis in order to use simplified expenses.

Partnerships with one or more corporate partners cannot use the simplified expenses scheme.

With simplified expenses, you can use flat rates instead of working out your actual business expenses. You can use simplified expenses for business costs for vehicles (a flat rate for mileage instead of the actual costs you paid for buying and maintaining the vehicle) and either:

• business use of your home (a flat rate based on the hours you work from home each month) or

• private use of business premises as a home (deduct from your total expenses a monthly flat rate based on the number of occupants each month)

All other expenses must be calculated in the usual way.

There is more information (including details of the flat rate to be used in 2020 to 2021 if claiming simplified expenses) in HMRC’s helpsheet HS222 How to calculate your taxable profits (2021).

Other income and profits (do not include SEISS, but include coronavirus support payments such as CJRS)

Box 3.50

Enter in box 3.50 any business income which you did not include as turnover in box 3.29. Coronavirus support scheme payments are taxable and include payments from the Coronavirus Job Retention Scheme (CJRS), Eat Out to Help Out Scheme and any other applicable HMRC coronavirus support scheme and payments the partnership was entitled to receive from local authorities or devolved administrations.

If the partnership received coronavirus support scheme payments, include in box 3.50 the amount the partnership received.

If any of the partners received an assessment issued by an officer of HMRC in respect of a coronavirus support scheme payment incorrectly claimed only include in box 3.50 the amount the partnership retained. Do not include in box 3.50 the amount of any sum that has been assessed which results in the repayment of coronavirus support scheme payments that the partnership was not entitled to.

If the partnership received Eat Out to Help Out Scheme payments and are VAT registered, exclude VAT from the amount you include in box 3.50.

If the partnership received a CJRS, Eat Out to Help Out Scheme or any other applicable HMRC coronavirus support scheme payment that it was not entitled to and it has not been voluntarily paid back to HMRC or none of the partners have received an assessment issued by an officer of HMRC in respect of the incorrectly claimed payment, put the incorrectly claimed amount in box 3.118.

Other examples might include rental income, interest and alternative finance receipts from a business bank or building society account, discounts received, non-arm’s length reverse premiums and so on.

Reverse premiums are payments or benefits which are received as an inducement to take a lease of any property other than your only or main residence. If the leased property is to be occupied for the partnership’s trade, profession or vocation the reverse premium will be a taxable receipt. If you have any doubt about the proper tax treatment of a reverse premium, ask us or your tax adviser.

If you’re including this income in a different place on the Partnership Tax Return make sure that you deduct it at box 3.71. For example, do not include bank interest in the net business profit or loss entered in box 3.73 if you intend to include it in Question 7, on page 8 of the return.

Partnership charges

Box 3.63

Amounts paid under an annuity or covenant are not allowable as an expense for tax purposes, even if paid for wholly commercial reasons in connection with the partnership trade or profession. Disallow any of these amounts by making an appropriate entry in box 3.45.

However, individual partners can claim relief for their shares of any trade charges paid during the period 6 April 2020 to 5 April 2021 (but only charges paid for wholly commercial reasons in connection with the partnership trade or profession). Read the notes for box 3.117 of this guide.

Other expenses

Add up all the expenses in the accounts not included elsewhere and enter the total figure.

Additional information (box 3.116)

Use box 3.116 on page 3 of the Partnership Tax Return if you want to explain any of your figures in more detail. For example:

• particulars of any significant or unusual items (either income or expenses) included in the figures

• details of receipts or expenses connected with the business which for any reason are not included in the figures

• an explanation of any tax adjustment to the net profit where the reason is not apparent from these figures

• an explanation of any items which are not included in Standard Accounts Information, but which affect the taxable profits

This may avoid any unnecessary enquiries being made. There is more information in HMRC’s helpsheet Information from your accounts 2021 (HS229).

Tax adjustments to net profit or loss for this accounting period

Box 3.66

Enter in box 3.66 the total of disallowable expenses included in boxes 3.30 to 3.45.

Box 3.67

Also make adjustments for goods which the partners have taken out of the business for their personal use or for their families or friends. Enter in box 3.67 the normal selling price of all goods taken out of the business for personal use, minus any sum paid into the business for the goods and which you’ve already included in the turnover in box 3.29.

Enter any amounts treated as profit by the trading income provided through third party rules in this box.

If any of the partners received one or more loans from a disguised remuneration scheme before 6 April 2017, include the amount of loan chargeable as partnership profits in the tax year 2020 to 2021. Ignore any loan repayments made on or after 5 December 2016 that were not repaid in money. Disregard any loan repayments made after 5 April 2019. Do not include any loans for which full and final settlement has been reached with HMRC.

See HMRC’s guidance Report and account for your disguised remuneration loan charge for more information.

Box 3.71

Make adjustments (deduct from a profit or add to a loss) in box 3.71 for any amounts you took into account in arriving at the partnership’s net profit or loss but which are either not taxable receipts or are not taxed as profits from the partnership’s trade or profession. You must include any taxable income that you include in box 3.71 in the appropriate part of the Partnership Tax Return.

The provision of personal services through a partnership where the client is not a public authority — deemed employment payment

Special rules about tax and National Insurance contributions may apply if the partnership provides a partner’s services or the services of others to clients, and the partner and partnership can answer yes to both the following questions:

• if the partner did not work through the partnership, would they be an employee of the client?

• does the partnership the partner works through meet one of the following conditions?

• the partner (or their family) is entitled to 60% or more of the partnership profits

• more or all of the partnership’s profits come from providing services to a single client

• the partnership’s profit-sharing arrangements ensure that the partner receives an amount based upon the amounts received for their services to clients

If the rules apply, the partner may have to pay additional tax and National Insurance contributions at the end of the tax year or earlier if they stopped being a partner. The partner will need to fill in an SA102 Employment page to show both the amount received, and any tax taken off.

Because the additional amount (a deemed payment) is treated as income from employment, the partnership has to apply PAYE and National Insurance contributions.

The partnership can take off the (deemed) payment, and any secondary Class 1 National Insurance contributions paid, when working out the partnership profits.

You can only use the deduction once as a tax adjustment when working out the taxable income of the partnership. Any relief is given against the profits for the accounting period in which the (deemed) payment is made (normally 5 April) and must not be split between the partnership’s accounting periods where the partnership makes up its accounts to a date other than 5 April.

The amount of the deduction allowed when working out the profits is limited to the amount that reduces those profits to nil. This means that the deemed payment and the secondary National Insurance contributions on that payment cannot make a loss.

Where the partnership expenses paid for doing the work exceed the allowed expenses and the 5% flat-rate allowance, any excess amount (when working out the deemed payment) is left out of the taxable profits.

Put any adjustment for disallowable expenses in box 3.66 and the amount of the deemed payment and any secondary Class 1 National Insurance contributions in box 3.71 on the Partnership Tax Return. If the accounts already include a deduction for secondary Class 1 National Insurance contributions, for example, under employee costs, include this amount in box 3.66.

You must tell us how you worked out your in box 3.116 Additional information on page 3 of the Partnership Tax Return.

Example — deemed payment calculation for engagements where the end client is not a public authority

Mr and Mrs Jones are in partnership and make up their accounts to 5 April 2021. All the partnership’s income comes from contracts covered by the new rules. Profits are split equally but Mrs Jones carries out the services.

Partnership accounts year ended 5 April 2021

	Amount
Income	£20,000
Expenses (A)	£5,000
Profit	£15,000

Mr and Mrs Jones were allocated £7,500 each.

Only £2,000 of the partnership’s £5,000 expenses would be allowable under employment income rules.

Calculation of deemed payment on 5 April 2021

The income from relevant engagements is £20,000

From this you need to deduct:

• 5% flat-rate allowance (£20,000 multiplied by 5% equals (B) £1,000)

• employee expenses (C) of £2,000

• secondary Class 1 National Insurance contributions on deemed payment of £1,183

The deemed payment is £15,817.

Recalculation of partnership’s taxable profit

The partnership profit (which should be entered at box 3.65) is £15,000.

Add:

• disallowed expenses (A) minus (B plus C) which equals £5,000 minus (£1,000 plus £2,000) giving a total of £2,000

Enter this total (£17,000) in box 3.66.

Note that the disallowed expenses are the excess of the partnership expenses in the accounts (A) over the sum of the 5% flat-rate allowance (B) and employee expenses (C).

Subtract:

• secondary Class 1 National Insurance contributions on deemed payment of £1,183  

• deemed payment (enter this in box 3.71) of £15,817

The taxable trading profit (enter in box 3.73) is £0.

Note that the deemed payment amount is always restricted to an amount that reduces the trading profit to nil.

The provision of personal services to a public authority through a partnership — deemed employment payment

From 6 April 2017, rules were introduced for the provision of personal services to a public authority. The deemed employment calculation rules are different to those not involving a public authority.

See HMRC’s guidance Off-payroll working (IR35): detailed information for information about supplying services through a partnership to a public authority.

Salaried members of limited liability partnerships

Salaried members of a limited liability partnership (LLP) are treated as employees rather than self-employed for Income Tax and National Insurancec purposes. This is because salaried members are engaged on terms that are closer to employment than self-employment.

There are 3 conditions that all have to be satisfied for a person to be a salaried member. If those conditions are satisfied the LLP must operate PAYE and deduct Income Tax and Class 1 National Insurance contributions from the salaried member’s earnings as they would with any other employee.

For more detailed guidance, including examples, see HMRC’s Partnership Manual.

If you’re unsure whether these rules apply to your LLP, ask us or your tax advisor.

Taxable profit or loss for this accounting period

Boxes 3.83, 3.84, 3.93 and 3.94

Fill in box 3.83 or box 3.84 in all cases.

If box 3.73 is a profit, enter the amount of the profit in box 3.83 and 0 (zero) in box 3.84.

If box 3.73 is a loss, enter 0 (zero) in box 3.83 and the amount of the loss in box 3.84.

If you’re unable to complete the income and expenses section because it’s impossible to prepare the figures to arrive at the taxable profit before the date for sending the Partnership Tax Return, provide an estimate of the taxable profit or loss in boxes 3.83 or 3.84 and tick box 3.93.

Tick box 10.1 on page 8 of the Partnership Tax Return. It would also help if you enter the following information in box 3.116 Additional information (on page 3 of the Partnership Tax Return):

• why you cannot give a final figure in box 3.83 or box 3.84

• an approximate date on which you expect to give your final figure

• if box 3.83 or 3.84 include income received from a disguised remuneration scheme, tick box 3.94

Subcontractors in the construction industry

Box 3.97

If the partnership is a subcontractor in the construction industry, it may have received payments made under the Construction Industry Scheme. If it has, enter in box 3.97 the total of the deductions made on account of tax from payments made to the partnership during the period 6 April 2020 to 5 April 2021 (see the section on Particulars to be supplied by a CT Partnership in these notes if you’re a CT Partnership).

If you’re completing more than one set of Partnership Trading pages enter this information on the pages for the most recent set of accounts.

Deductions are shown on payment and deduction statements which the partnership should have received from the contractors for whom it worked. Contractors must give these statements to subcontractors who are paid under deduction. Do not send these statements with the Partnership Tax Return. If you have not received payment and deduction statements, ask the contractors for whom the partnership worked to provide them.

If you cannot get a statement, give the following details in box 3.116 Additional information on page 3 of the Partnership Tax Return:

• the name and address of the contractor

• the month payments were made to you

• the amount of the gross payment

• the amount deducted on account of tax

If you were given a statement but you’ve lost your copy, ask the contractor to give you another copy.

Tax taken off trading income

Box 3.98

Enter in box 3.98 any tax taken off amounts returned as trading income (excluding deductions made by contractors on account of tax) between 6 April 2020 and 5 April 2021 (see the section on Particulars to be supplied by a CT Partnership in this guide if you’re a CT Partnership). If you’re completing more than one set of Partnership Trading pages enter this information on the pages for the most recent set of accounts.

Summary of balance sheet for this accounting period

Box 3.99 to 3.115

If the partnership’s accounts include a balance sheet, copy the entries to the appropriate boxes. If the partnership does not have a balance sheet, leave these boxes blank. If the partnership’s annual turnover was more than £15 million, leave these boxes blank and send the full accounts and computations with the return.

Make sure that you’ve transferred all the figures to the summary in boxes 3.99 to 3.115 and that each is included once only. Do not bring in any figures not appearing in the balance sheet (unless making an adjustment for partners’ personal expenses — see the section on partners’ personal expenses in this guide).

Use your judgement to transfer the figures from the accounts to the most appropriate boxes.

Depending on the circumstances of the business, certain elements in the balance sheet may appear as assets or as liabilities. For example, a bank account with business funds in it will be an asset while an overdrawn account will be a liability.

For the former put the balance in box 3.103, while if the account is overdrawn, put that balance in box 3.107.

Other elements which might be affected in this way are most commonly the Capital Account balances and the net profit or loss. Where a balance on the Capital Account is overdrawn or the business made a net loss in the year, enter the amount in brackets. Give the total figures for all the partners here.

The figure of net profit or loss appearing in the balance sheet should be the same as that you entered in box 3.65 for the same period. The figure for net business assets in box 3.110 should equal the figure for the balance of the Capital Account at the end of the period (box 3.115).

Where partners’ personal expenses have been included in arriving at the figure of net taxable profit or loss, and these expenses have not been included in the partnership’s accounts, either:

• make corresponding adjustments to figures returned in boxes 3.112 to 3.114

• use the accounts figures in boxes 3.112 to 3.114 and provide a reconciliation in box 3.116 Additional information on page 3 of the Partnership Tax Return

Partnership trade charges

Box 3.117

Although amounts paid under an annuity or covenant are not allowable as a partnership expense for tax purposes, individual partners can claim relief for their shares of any trade charges actually paid during the tax year.

Enter in box 3.117 the net amount of charges paid for wholly commercial reasons in connection with the partnership trade or profession during the period 6 April 2020 to 5 April 2021. That’s the net amount paid after tax is taken off.

You must separately identify the amount entered in box 3.117 in the Partnership Statement.

Incorrectly claimed coronavirus support scheme payments

Box 3.118

Only complete this section if the partnership incorrectly claimed any payments from the CJRS, Eat Out to Help Out Scheme or from any other applicable HMRC coronavirus support scheme during the year ended 5 April 2021 and:

• the partnership has not already told HMRC about these amounts

• the partners have not received an assessment issued by an officer of HMRC for these amounts

lf the partnership received a CJRS, Eat Out to Help Out or any other applicable HMRC coronavirus support scheme payment that it was entitled to, do not include them here. Instead, include them in the relevant boxes of the Partnership Tax Return or supplementary pages.

If the partnership was not entitled to some or all of the payments received and it has not told HMRC, we have the right to assess and recover the full amount of any incorrectly claimed grant by making an officer’s assessment for the amount that it was not entitled to and have not repaid.

If we have already contacted any of the partners to raise an assessment, you do not need to declare the overpaid amounts in this section. See factsheet CC/FS48 and factsheet CC/FS11 for more information about receiving grants you were not entitled to and penalties.

If the partnership made an error in a claim that has resulted in receiving too much of an HMRC coronavirus support scheme payment, that payment must be paid back to HMRC. If the partnership has not put that right already by making a voluntary adjustment or repayment that was agreed by HMRC, put the incorrectly claimed amount in box 3.118.

One of the partners should then include this amount in their own self assessment for the year ended 5 April 2021. Do not include any payments the partnership was entitled to or has already repaid or any of the partners have been assessed on.

Foreign income and tax credits

If any of the income included in the entries in box 3.26 or box 3.73 includes amounts which have been taxed abroad, the partners may be able to claim a credit against their UK tax bill. An essential feature of the allowance of relief for foreign tax paid is the need to separately identify each and every item of the partnership’s overseas income.

Foreign income and tax — example 1

An entry in box 3.73 showing UK taxable trading profits of £150,000 may include:

Nature of income	Foreign profits	Foreign tax paid or suffered
Trading profits (Country A)	£25,000	£8,500
Trading profits (Country B)	£15,000	£4,000
Trading profits (Country C)	£17,500	£5,000

The amount of foreign income may be estimated, for example, in proportion to turnover, or a more precise calculation may be made using the actual expenses incurred in earning overseas receipts.

Each partner will have to be allocated a share of each item of foreign income (and the associated foreign tax credit) in proportion to their share in the total profit shown at box 3.26 or box 3.73.

Foreign income and tax — example 2

If a particular partner had a one-fifth share in trading profits the partner’s share of the items shown above would be:

Nature of income	Share of foreign profits	Share of foreign tax paid or suffered
Trading profits (Country A)	£5,000	£1,700
Trading profits (Country B)	£3,000	£800
Trading profits (Country C)	£3,500	£1,000

If the partnership has any foreign trading or professional income which has been taxed abroad, give a detailed analysis in box 3.116 Additional information on page 3 of the Partnership Tax Return.

Transfer of information to the Partnership Statement

The partners need to know their share of certain entries in the Partnership Trading pages when calculating the tax due on their shares of trade and professional income.

Transfer the amount of:

• any adjustment in box 3.82 to box 11A, only adjustment income allocated to those who were partners during the return period is transferred to the Partnership Statement

• any net profit in box 3.83 to box 11

• any net loss in box 3.84 to box 12

• any CIS deductions made on account of tax in box 3.97 to box 24

• any tax taken off trading income in box 3.98 to box 24A

• any partnership charges in box 3.117 to box 29

• any amount of incorrectly claimed HMRC coronavirus support scheme payments which were received in the year ended 5 April 2021 to box 12B

If you want to allocate these figures between the partners at the same time, see the section on How to allocate profit to the partners in this guide. Otherwise move on to Question 7.

Transfer the declaration of disguised remuneration income from box 3.94 to box 12A.

Question 7: Did the partnership receive any other income which you’ve not already included elsewhere in the Partnership Tax Return?

If you do not tick the Yes box, go to the Partnership Statement on page 6 of the Partnership Tax Return.

Otherwise, check the following lists to see whether to include the income in the Partnership Tax Return.

Exclude:

• Premium Bond, National Lottery and gambling prizes

• accumulated interest on National Savings & Investments Certificates, including index-linked certificates

• interest awarded by a UK court as part of an award of damages for personal injury or death

• receipts under a permanent health insurance policy. Only include those that are trading receipts because they’re to meet the sick pay of employees

• gains on UK life assurance policies, life annuities or capital redemption policies, even if the policy or contract was effected by, or is in, the partnership’s name (the special rules for taxing these gains mean that each partner’s share of the gain should be shown on their personal tax return. If you need more help, ask us or your tax adviser)

• accrued income on transfer of securities

• profits from selling certificates of deposit

Include:

• interest, including interest in kind and alternative finance receipts from UK banks or building societies

• interest and alternative finance receipts from savings held at an overseas branch of a UK bank or building society

• interest distributions from UK authorised unit trusts, open-ended investment companies and investment trusts

• National Savings & Investments First Option Bonds, (no longer on sale) Guaranteed Income Bonds and Guaranteed Growth Bonds

• income from other National Savings & Investments products (except accumulated interest on National Savings & Investments Certificates)

• other savings income, disguised interest, annuities, deeply discounted securities

• dividends from UK companies, UK authorised unit trusts, open-ended investment companies and investment trusts

• Property Income Distributions (PIDs) from UK Real Estate Investment Trusts and Property Authorised Investment Funds

• other distributions

• UK stock dividends

• other income of the partnership which is not included elsewhere in the Partnership Tax Return

Interest in Kind

Interest includes interest received in non-cash form. You’ll usually receive any interest in kind, that’s non-cash interest, after tax has been taken off. The company or person taking off the tax must provide you with a statement showing the value of the interest before tax is taken off, the amount of tax taken off, the net value of the interest paid and the date of the payment.

Disguised interest

If you receive an interest-like amount from financial products or arrangements it will be taxable under rules for disguised interest if it is not taxed under other rules.

An amount will be interest-like if it’s calculated like interest and it’s practically certain from the outset that you’ll receive it. The rules apply to products you invest in and arrangements you enter into from 6 April 2013 onwards.

There may be liability to either Income Tax or Capital Gains Tax if the partnership has:

• received cash as a result of a merger of 2 or more building societies

• received cash, or been issued with shares, or received both cash and shares, as a result of either

• a conversion of a building society to a company

• a takeover of a building society by a company

The building society may be able to tell you whether there’s any tax liability. If not, ask us or your tax adviser.

If the partnership received cash, then:

• if the payment is liable to Income Tax (which is likely if it received it following a building society merger), enter it in boxes 7.7 to 7.9 (or box 7.9A)

If you’re not sure whether the amount is liable to Income Tax, include it in boxes 7.7 to 7.9 (or box 7.9A) then tick box 10.1 on page 8 of the Partnership Tax Return and give full details of the payment in box 3.116 Additional information on page 3 of the Partnership Tax Return.

If the payment is liable to Capital Gains Tax (which is likely if the partnership received it following a conversion or takeover of a building society), give details of that sum in the Partnership Disposal of Chargeable Assets pages

If the partnership received shares following a building society takeover or conversion, you may need to supply details only when it disposes of those shares. For more information download the Partnership disposal of chargeable assets notes.

Filling in the boxes

If the partnership’s only other income is interest or alternative finance receipts paid by a bank or building society, fill in box 7.9A on page 8. Otherwise see the SA804 form and fill in those instead.

Interest and alternative finance receipts paid with tax taken off

The return period for all taxed income is the period 6 April 2020 to 5 April 2021 (see the section on return period for CT Partnership in these notes).

Box 7.9A

Copy the figure in box 7.9A to box 13 of the Partnership Statement on page 6.

Filling in the Partnership Statement

The Partnership Tax Return includes a Partnership Statement (on pages 6 and 7) for summarising the profits, losses or income allocated to the partners.

There are 2 types of Partnership Statement:

• a full version covering all the possible types of partnership income

• a short version for partnerships that have only trading or professional income and interest or alternative finance receipts from banks, building societies or other deposit takers

The Partnership Tax Return that we’ve sent to you includes the short Partnership Statement. You can find the full Partnership Statement SA800(PS) on GOV.UK.

You may need to fill in more than one Partnership Statement if, for example, the partnership has made up more than one account ending in 2020 to 2021 or if the partners included companies or non-residents — read the notes for Question 5 in this guide.

The short Partnership Statement caters for up to 3 partners. If there were more than 3 partners, either photocopy page 7 of the Partnership Tax Return before you fill it in and use the photocopies, or download additional copies from the Self Assessment: Partnership (short) (104S) page on GOV.UK.

Attach the pages to the Partnership Tax Return when you send it back.

Work your way through the Partnership Statement box by box.

It’s set out to help you provide a summary of the:

• partnership profit (and related items) for 2020 to 2021

• shares of profit (and related items) allocated to the partners who were members of the partnership during the return period or periods covered by the Partnership Tax Return

The return periods for different types of income are explained in this guide.

You need only fill in the boxes appropriate to your partnership. Enter a valid Unique Taxpayer Reference (UTR) for each partner in box 8 on the Partnership Statement.

Requests to register and get a UTR for either a UK resident partner or a non-UK resident partner must be made using:

• form SA401 for an individual

• form SA402 for a partner who is not an individual

You must also allocate each item in the summary of the partnership profit to the partners.

A summary of the shares allocated to each partner is needed for each partner who was a member of the partnership during the period (or periods) covered by the Partnership Tax Return. Each partner will also need this same information to fill in their personal tax return for 2020 to 2021 (or for 2019 to 2020 if they ceased to be a partner before 6 April 2020 but during the return period covered by the Partnership Tax Return).

If the profits are shared between the partners on a simple percentage basis (for example, 50% each), then we do not need any more information. We can work out the profit-sharing arrangement from the allocated shares if we need to correct any mistakes.

If the profits are not shared on a simple percentage basis, for example, if a partner is entitled to a fixed share or salary, give details of the profit-sharing arrangements in box 3.116 Additional information on page 3 of the Partnership Tax Return.

The green text on the Partnership Statement indicates where the shares of profit (and related items) must be entered in each partner’s own personal tax return. A copy of the Partnership Statement, or the section of the statement containing the summary of the shares allocated to a particular partner, will usually provide all the information partners need to fill in the Partnership pages of their own tax return. (You may need to provide partners with more detailed or additional information on foreign income and disposals of chargeable assets.)

How to allocate profit to the partners

In the first instance the allocation of profit (or related item) should usually follow the commercial profit-sharing arrangement for the period for which that profit (or related item) has been returned.

However, there are special rules for 2 situations where:

• the commercial allocation produces a mixture of notional profits and losses

• the mixed membership rules apply

Mixture of notional profits and losses

Trade and professional income

The allocation of profit (or related item) should, in the first instance, follow the commercial profit-sharing arrangement for the accounting period for which the trade or professional income has been returned.

For each partner enter the total share allocated in the box provided.

Trade and professional income — example 1

A partnership consisting of Mr Jones and Mrs Smith made a trading profit of £10,000. So the entry in box 11 of the Partnership Statement is £10,000.

Mrs Smith was entitled under the terms of their partnership agreement to a salary of £2,000 with the balance of profits being shared equally, that is:

£10,000 minus £2,000 (equals £8,000) multiplied by 50% which equals £4,000 each.

For Mr Jones the total profit allocated is £4,000 and this is entered in box 11 in Mr Jones’ statement.

For Mrs Smith, the total profit allocated is:

£2,000 plus £4,000 (equals £6,000) and this is entered in box 11 in Mrs Smith’s statement.

Complete the Additional information box, box 3.116, on page 3 of the Partnership Tax Return to show that Mrs Smith is entitled to a salary of £2,000 with the balance of profits being shared equally.

However, the allocation process cannot create or increase a loss. For tax purposes the allocation of profit (or loss) between partners must result in a straight apportionment of the actual profit (or loss) made by the partnership.

If the initial allocation using the commercial profit-sharing arrangement for all the partners produces a mixture of notional profits and losses, the actual partnership profit (or loss) must be reallocated between the profit-making (or loss-making) partners alone. This reallocation is made in proportion to the notional profit (or loss) initially allocated to those partners.

Trade and professional income — example 2

Mr Red, Ms White and Mrs Blue are in partnership. They made a trading profit of £8,900, so the entry in box 11 of the Partnership Statement is £8,900. The following applies:

• Mr Red and Ms White are entitled to salaries of £5,200

• the balance of profits are shared equally

The table below shows how the partnership profit of £8,900  would initially be allocated.

	Red	White	Blue	Total
Salary	£5,200	£5,200	nil	£10,400
Balance of profit	£500 loss	£500 loss	£500 loss	£1,500 loss
Net allocated	£4,700	£4,700	£500 loss	£8,900

In this calculation:

• the aggregate notional profit allocated to Mr Red and Ms White is £9,400 (not £8,900 the profit actually made by the partnership)

• Mrs Blue is allocated a notional loss of £500, even though no loss was actually made by the partnership

This means the actual partnership profits must be reallocated between the profit- making partners. The reallocation is made in proportion to the notional profit initially allocated to each partner. In this case it’s a 50% split between Mr Red and Ms White (£4,700 each, totalling £9,400). This is shown in the next table.

	Red	White	Blue	Total
Net allocated	£4,700	£4,700	£500 loss	£8,900
Percentage	50%	50%	0%	Not applicable
Reallocated	£4,450	£4,450	nil	£8,900

This means:

• for Mr Red and Ms White this reallocation is equivalent to a 50% share of the balance of profit, in this case a loss of £750

• for Mrs Blue this reallocation is equivalent to a 0% share of the balance of profit, in this case £0

• for Mr Red and Ms White the total profit allocated is £4,450 (£5,200 minus £750)  and is entered in their statements

• for Mrs Blue the total profit allocated is 0 (0 plus 0) and is entered in her statement (of course Mrs Blue may be entitled to a share in some other source of income)

Complete the Additional information box on page 3 of the Partnership Tax Return to explain that Mr Red and Ms White are  entitled to salaries of £5,200 and the balance of profits are shared equally.

If you need more advice on how to allocate profits (or losses), ask us or your tax adviser.

Mixed membership partnership rules

Rules in Finance Act 2014 require the reallocation of profits or losses under certain circumstances. More guidance on the application of these rules can be found in HMRC’s Mixed Membership Partnership, AIFMs and Asset Disposal Rules: guidance.

If you’re unsure about the applicability of these rules, or how to allocate profits or losses when they apply, then ask us, or contact your tax adviser.

Other types of income and related items

The allocation of any other item of profit (or a related item such as a tax credit) should, in the first instance, follow the commercial profit-sharing arrangement for the period for which that profit (or related item) has been returned.

If the profit (or related item) has been returned for an accounting period, then the allocation should be made to the partners who were partners during that accounting period.

If the profit (or related item) has been returned for the period 6 April 2020 to 5 April 2021, then the allocation should be made to the partners who were partners during the period 6 April 2020 to 5 April 2021.

Where exceptionally this process produces a mixture of notional profits and losses, the special rules apply (see example 5 above).

However, in most cases partnership income other than from a trade or profession is shared on a straight apportionment basis in the same ratio as applies to the balance of trade or professional income.

Examples of allocations for different types of income (and related items)

Trade and professional income

Trade and professional income — example 3

Richard and Jonathan are in partnership as carpenters. The results recorded in the Partnership Trading pages are as follows:

Profit or deductions	Box	Amount
Profit	box 3.83	£18,000
CIS deductions	box 3.97	£6,000

In the summary of partnership profits £18,000 is entered in box 11 and £6,000 in box 24.

The profits and CIS deductions are allocated in the ratio two-thirds:one-third, as follows:

Profit or deductions	Richard	Jonathan
Profit	£12,000	£6,000
CIS deductions	£4,000	£2,000

In the statement for Richard, £12,000 will be entered in box 11 and £4,000 in box 24. In the statement for Jonathan, £6,000 will be entered in box 11 and £2,000 in box 24.

Trade and professional income — example 4

Julia and Caroline are in partnership. Their business activities comprise 2 trades — running a village shop and running the tea rooms at a local stately home. The results from each activity are recorded in separate sets of Partnership Trading pages as follows:

Business	Profit or loss	Box	Amount
Village shop	loss	in box 3.84	£12,000
Tea rooms	profit	in box 3.83	£22,500

Separate Partnership Statements are required for each trade. The summary for the village shop will show a £12,000 loss at box 12 — the summary for the tea rooms will show £22,500 at box 11.

The profits and losses are allocated equally, as follows:

Business	Profit or loss	Julia	Caroline
Village shop	loss	£6,000 loss	£6,000
Tea rooms	profit	£11,250	£11,250

Two summaries of partner’s share will be required for each partner. On one a loss of £6,000 will be entered in box 12, on the other a profit of £11,250 will be entered in box 11.

Savings, investments and other income

Foreign income

An essential feature of the allowance of relief for foreign tax paid is the need to separately identify each and every item of overseas income so that each partner can claim tax relief for their share of any foreign tax paid.

Foreign income — example 1

The entries on the Partnership Foreign pages may include:

Nature of income	Foreign profits	Foreign tax paid
Dividends (Company X)	£1,200	£150
Dividends (Company Y)	£600	£150
Interest (Company N)	£3,000	£1,500

Allocate to each partner their share of each item of foreign income (and the associated tax credit). For example, if the partnership has 3 partners entitled to equal shares of profits.

Nature of income	Share of foreign profits	Share of foreign tax paid
Dividends (Company X)	£400	£50
Dividends (Company Y)	£200	£50
Interest (Company N)	£1,000	£500

When you’ve allocated the foreign income and foreign credits on a country-by-country basis, let each partner have details in the format shown above. Let us have a copy of the allocation to the partners in the same format in box 3.116, additional information, on page 3 of the Partnership Tax Return.

Foreign income — example 2

John, Hugh and David are in partnership. They share profits equally. In the year ended 31 December 2020 the partnership, in addition to its trading profits, received income from the letting of a property situated abroad.

The partnership made a profit of £12,000 from the letting and foreign tax of £3,000 was paid on this.

Page PF 3 is filled in and £12,000 is entered in column B on page PF 2 against the entry Income from land and property and the tax of £3,000 in column D. Also enter £12,000 in box 2.7 and £3,000 in box 2.8. These figures are then allocated amongst the partners as follows:

	John	Hugh	David
Income from land and property	£4,000	£4,000	£4,000
Foreign tax	£1,000	£1,000	£1,000

Enter £4,000 in box 17 in the summary of partner’s share for each partner and £1,000 in box 28. £12,000 is entered in box 17 and £3,000 in box 28 of the Partnership Statement (full).

Rental business

Rental business — example 1

Nigel, Tom and Alice are in partnership. In the year ended 5 April 2020 they have property income as follows:

Lettings	Profit	Amount
Furnished holiday lettings	profit	£12,000
Furnished lettings	profit	£3,000
Unfurnished lettings	profit	£6,000

They share profits and losses equally.

A completed set of pages PL 1 and PL 2 for Nigel, Tom and Alice will have box entries as follows:

• box 1.16: £12,000

• box 1.39: £9,000

The amount entered in box 20 in the Partnership Statement is £12,000 and in box 19 is £9,000.

The profits and losses are allocated as follows:

	Nigel	Tom	Alice
Furnished holiday lettings profit	£4,000	£4,000	£4,000
Rental profit	£3,000	£3,000	£3,000

The entries required in the Partnership Statement (full) are the same for each partner. An entry of £4,000 is made in box 20 and an entry of £3,000 in box 19.

Disposal of chargeable assets

Although you only need to enter the total proceeds allocated to each partner in box 30 of the Partnership Statement (full), the partner will need the details of each disposal to calculate any tax due.

Disposal of chargeable assets — example 1

Sue, Bob and Anna are in partnership. During the year 2019 to 2020 the partnership disposes of the following 3 chargeable assets:

Asset	Amount
Asset 1	£10,000
Asset 2	£7,000
Asset 3	£21,000
Total proceeds	£38,000

The amount to be entered in box 4.1 on page PA 1 and in box 30 in the summary of partnership’s profits is £38,000.

Sue, Bob and Anna had shares in these 3 assets as follows:

Asset	Sue	Bob	Anna
Asset 1	3 quarters	1 quarter	nil
Asset 2	1 half	1 half	nil
Asset 3	1 third	1 third	1 third

The disposal proceeds must be allocated as follows:

Asset	Sue	Bob	Anna
Asset 1	£7,500	£2,500	£0
Asset 2	£3,500	£3,500	£0
Asset 3	£7,000	£7,000	£7,000

The amounts entered in the summaries of partner’s share in box 30 in the statement for each partner are:

Sue	£18,000
Bob	£13,000
Anna	£7,000

Question 8: Are the details on the front of the Partnership Tax Return wrong?

If you do not tick the Yes box, go to Question 9. If you tick the Yes box, make the corrections on the front of the Partnership Tax Return.

Tell us of a change of address within the last 12 months by putting the words new address alongside the address box on page 1 of the Partnership Tax Return. Alternatively, you can provide your new address in box 3.116, Additional Information on page 3 of the Partnership Tax Return.

Question 9: Give a daytime phone number in boxes 9.1 and 9.2

Boxes 9.1 to 9.3

Put your, or your adviser’s, phone number in the appropriate box. Include the area code. (If you give your adviser’s phone number also give the adviser’s name and address in box 9.3.).

Question 10: Other information

Provisional figures

Box 10.1

Do not delay sending the Partnership Tax Return to us just because you do not have all the information you need. You must do your best to get the information, but if you cannot provide final figures by the time you need to send the Partnership Tax Return, then provide provisional amounts.

It’s important that we receive the Partnership Tax Return by the due date.

Tick box 10.1 and say which figures are provisional in box 3.116 Additional information on page 3 of the Partnership Tax Return (refer to appropriate box numbers in the Partnership Tax Return).

It would also help if, in box 3.116, you:

• say why you could not give final figures

• give an approximate date on which you expect to give your final figures

If you use provisional figures you must have taken all reasonable steps to get the final figures, and make sure that they’re sent as soon as they’re available. We do not regard pressure of work either on you or your tax adviser, or the complexity of the partnership’s affairs, as reasons for using a provisional figure.

You must make sure that any provisional figures that you do include are reasonable and take account of all information available to you. If you carelessly submit a provisional figure that’s either inaccurate or unnecessary, each partner may have to pay a penalty.

Estimates (including valuations)

In some situations you may need to provide an estimated figure or a valuation that you do not intend to amend at a later date. Broadly, this will be the case where:

• a valuation is required (for example, of an asset at a certain date for the purposes of calculating Capital Gains Tax liability)

• there is inadequate information to enable you to arrive at a reliable figure (for example, where the records concerned have been lost or destroyed)

• although there’s inadequate information to arrive at a precise figure, a reliable estimate can be made (for example, where the private proportion of an expense such as motoring expenses has been calculated on the basis of the detailed records of a representative sample period)

Identify any valuations that you’ve used, either by ticking the appropriate box in the Partnership Tax Return, and providing the details which the notes ask for, or by identifying the figure in box 3.116 Additional information on page 3 of the Partnership Tax Return and giving details of the valuation. Do not tick box 10.1.

Also identify any figures in the Partnership Tax Return which may not be very reliable, explaining, where appropriate, how the figure has been arrived at. But if you’re including an estimate which, while not a precise figure, is sufficiently reliable to enable you to make an accurate return, there’s no need to mention this.

Disclosure of tax avoidance schemes

Boxes 10.2 and 10.3

Enter in box 10.2 the promoter reference number (PRN) for the monitored promoter of any scheme or arrangement the partnership has used to get a tax or National Insurance contributions advantage now or in the future. In most cases you’ll have received the PRN from the scheme promoter but in some cases you may have received the PRN from an intermediary or from another client of the promoter.

Enter in box 10.2 the scheme reference number (SRN) of any scheme or arrangement the partnership has used to get a tax or National Insurance contributions advantage now or in the future. In most cases you’ll have received the SRN from the scheme promoter on form AAG6, Disclosure of Tax Avoidance Schemes — Notification of Scheme Reference Number, but in some cases you may have received the SRN from HMRC.

Advantage here means either:

• relief or increased relief from Income Tax or National Insurance contributions

• repayment or increased repayment of Income Tax or National Insurance contributions

• the avoidance or reduction of a charge to Income Tax or National Insurance contributions

• the avoidance of an assessment or a possible assessment to Income Tax or National Insurance contributions

• the deferral of any payment or the advancement of any repayment of Income Tax or National Insurance contributions

• the avoidance of any obligation to deduct or account for Income Tax or National Insurance contributions

Put each number (up to 3) on a separate line.

If you have both PRNs and SRNs, put your PRNs in the first row and your SRNs below.

If you were a party to more than 3 schemes, you must report details of additional schemes for which you’ve been given:

• SRNs using form AAG4

• PRNs relating to the scheme promoter using form AAG4(PRN)

Forms AAG4 and AAG4 are available from HMRC’s Tax avoidance schemes forms page.

HMRC never approves tax avoidance schemes. If you fail to tell us the SRN or PRN when required to do so, you’ll have to pay a penalty.

If a tax or National Insurance contributions advantage arose in the 2020 to 2021 tax year, put 2021 in box 10.3. If no advantage arose in 2020 to 2021 but an advantage is expected to arise in a later year, put the earliest future year in which that advantage is expected to arise in box 10.3, for example 2022. Even if you’ve reported the SRN or PRN in a previous return, you must continue to report it until there’s no longer an advantage (for example, until losses produced by the scheme have been used up).

See HMRC’s Promoters of tax avoidance schemes: guidance for more information on the rules for disclosure of tax avoidance schemes and arrangements and monitored promoters and monitored promotions.

Coronavirus support scheme payments declaration

Box 10.4

If this partnership received any coronavirus support scheme payments put a tick in box 10.4 to confirm that these payments have been included as taxable income in the relevant boxes of this tax return for the purposes of calculating the partnership profits.

Read the notes in this guide or in the notes for the relevant supplementary pages of the Partnership Tax Return for more details about where to include these payments.

Question 11: Declaration

Boxes 11.1 to 11.4

Read the declaration carefully. Tick the boxes opposite the pages you’ve filled in. Enter in box 11.1 the number of additional Partnership Statements you’re sending as part of the Partnership Tax Return. You must complete a summary for each partner who was a member of the partnership during each of the periods for which information is included in the Partnership Tax Return. Enter in box 11.2 the number of partners who were in this partnership during the period for which information has been returned.

If you’ve filled in the Partnership Tax Return

Sign and date the declaration in box 11.3 and print your name under your signature. Send back any supplementary pages that you’ve filled in.

If you’ve had the Partnership Tax Return filled in for you by someone else

If you’ve had the Partnership Tax Return filled in for you by someone else acting on your behalf, you must still sign the return yourself to confirm to us that, to the best of your knowledge, it’s correct and complete. This applies whether you’ve paid for the services of an accountant or other tax practitioner, or have simply had help from a friend or relative.

Always allow sufficient time for checking and signing the return if it has been filled in by someone on your behalf (particularly if you’re likely to be abroad near the deadline for sending the return to us). Failure to make appropriate arrangements could mean that you miss the deadline and that we charge you and your partners penalties and interest on any tax paid late.

Exceptional circumstances in which someone other than the taxpayer can sign a Partnership Tax Return

For persons who are mentally incapable of understanding the Partnership Tax Return it may be filled in and signed on their behalf by the following authorised persons:

• a Receiver appointed by the Court of Protection (England and Wales)

• a Curator Bonis appointed by the Office of the Accountant of Court (Scotland)

• a Controller appointed by the Court of Care and Protection (Northern Ireland)

• an Attorney appointed under an Enduring Power, registered in the appropriate court

• any person so authorised by any of the above courts

If you have not previously provided us with evidence of your appointment, enclose the relevant documentation with the return.

Payment of tax on partnership profits

Each partner is individually responsible for paying tax due on their share of the partnership profits. Payment has to be made to the individual partner’s Self Assessment account. Usually partners will pay their own liability.

Exceptionally a partnership may wish to make one payment on behalf of some or all of the partners. When making a partnership payment you must provide full details of how the payment is to be apportioned between the individual partners.

Payment and what happens next

Paying HMRC

You can pay by one of the following methods:

• online or telephone banking (Faster Payments)

• CHAPS

• debit or corporate credit card online

• at your bank or building society

• BACS

• Direct Debit (if you’ve set one up with HMRC before)

• by cheque through the post — a maximum of 99 payslips can accompany each cheque (a totalled list would also be helpful)

We recommend that you make your payment electronically as this is more efficient and secure. See HMRC’s guidance on paying your tax bill.

What happens if the return is incorrect?

As nominated partner you’re responsible for the accuracy of the Partnership Tax Return.

If it’s incorrect and the partners have paid too much tax, we’ll repay it to them plus interest on the amount overpaid.

If it’s incorrect and the partners have not paid enough tax, we’ll ask for further tax — we may require them to pay interest from the original due date and a late payment penalty.

If you send the Partnership Tax Return and then find out that you made a mistake, let us know at once.

If the Partnership Tax Return is incorrect because you’ve failed to take reasonable care, each partner may face a maximum penalty ranging from 30% to 100% of the difference between the correct tax due on that partner’s share of partnership profits and the amount due on figures the partnership has provided. This could be up to 200% if the income or gains not being declared arose outside the UK. In some circumstances we may also prosecute the partners for deliberate errors.

Where the income of a partnership is wholly investment and the partnership is unable to provide all the indirect partner information required under 12AB (1C) TMA70 and the reporting partnership has no indirect non-UK resident members that have a UK tax liability on this income, they do not have to provide calculations on either of the non-resident bases to HMRC.

If you have a complaint

Problems can usually be settled most quickly and easily by the office that you’ve been dealing with. We’ll always give you a contact name or number in any correspondence we send to you.

If you cannot settle a matter with the office you’ve been dealing with, you can write to:

• the director with overall responsibility for that office or unit

• if the problem concerns the service you’ve been given by an accounts office, the director of that office

The director will look into your case and quickly let you know the outcome. See HMRC’s complaints page for more information about how to complain and contact details.

If you’re still not happy

If the director has not been able to settle your complaint to your satisfaction, you can ask the Adjudicator to look into it and recommend appropriate action. The Adjudicator is an impartial referee whose recommendations are independent.

The Adjudicator’s address is:

The Adjudicator’s Office

PO Box 10280

Nottingham NG2 9PF

Telephone: 0300 057 1111

Fax: 0300 059 4513

Find out about call charges

You can also find out how to complain to the Adjudicator.

Finally, you can ask your MP to refer your case to the independent Parliamentary and Health Service Ombudsman. The Ombudsman will accept referral from any MP, but approach your own MP first. More information is available from:

The Parliamentary and Health Service Ombudsman

Millbank Tower

Millbank

London SW1P 4QP

Telephone: 0345 015 4033

Your rights and obligations

HMRC Charter explains what you can expect from us and what we expect from you.

How we use your information

HMRC publishes details about how we use your information.