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HMRC internal manual

Enquiry Manual

HM Revenue & Customs
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Partnerships: SA Return

TMA 70/S8(1B)

TMA 70/S12AA

TMA 70/S12AB

The rules for calculating taxable profits operate by reference to sources of income. Where, for example, a partnership carries on a trade, that trade is a single source within Part 9 Income Tax (Trading and Other Income) Act 2005. So, although the rules for the assessment and payment of tax operate on the partners individually, all matters relating to the calculation of partnership profits or income are dealt with centrally in the partnership return made on behalf of all the partners.

The partnership return includes all the information required to calculate the profits arising from any partnership business, including any claims (such as capital allowances) that must be taken into account when calculating the profits of that business. It also includes details of any partnership investment income and information on the disposal of partnership assets which might give rise to a chargeable gain or an allowable loss to the partners.

The return also includes each partner’s share of that income, consideration, loss, tax credit or charge. The partners must enter exactly the same figure in their personal return of total income.

The partnership return is subject to similar rules regarding repair/correction of obvious errors by an officer of HMRC or amendment by the partnership, as apply to a self assessment.

Where a partnership return is either corrected by HMRC, or amended by the partnership, corresponding changes must be made to the individual partners’ self assessments. In either case, notices should be issued to each partner by HMRC amending any self assessment previously returned.