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HMRC internal manual

Compliance Handbook

From
HM Revenue & Customs
Updated
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Publishing details of deliberate tax defaulters: Partnerships: IT, CGT and CT

For the purposes of income tax, capital gains tax and corporation tax a partnership is not a person which can incur relevant penalties. A partnership does not pay those taxes on its profits.

Partnership profits are allocated to the individual partners in accordance with the partnership agreement. Each partner is solely responsible for the tax due on their share of partnership profits.

It follows that where there is an inaccuracy in the partnership return, any additional profits are allocated to the individual partners. Each partner may be liable to a penalty in respect of the inaccuracy that led to the understatement of their share of profits.

This means that for income tax, capital gains tax and corporation tax the five publication questions, see CH190620, apply to each partner individually.

We will publish the details of each individual partner for whom the answer to all five questions is ‘yes’.

There is an example at CH191260.

You will find guidance about

  • partnerships generally at EM7000+
  • partnerships and penalties for inaccuracies at CH84700+.