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HMRC internal manual

Information Disclosure Guide

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HM Revenue & Customs
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Confidentiality when dealing with the customer: disclosure to companies: business partnerships

Partnerships

A partner can be an individual or another business, e.g. a limited company or another partnership. Except in Scotland, partnerships do not have a separate legal personality - see BIM82035 - Partnerships - general notes: Scottish partnerships.

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. 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, irrespective of how much or how little they have taken out of the business.

Nominated Partners (Representative Partner)

The terms ‘nominated partner’ and ‘representative partner’ are synonymous. The term ‘nominated partner’ was introduced under self assessment.

Unless, exceptionally, the partnership return is issued to a named individual, the members of the partnership are required to nominate one partner to complete and file the partnership return including the partnership statement. This partner is referred to as the `nominated partner’. If the nominated partner is subsequently unavailable the members of the partnership may choose a successor and must notify the change to HMRC. If no nomination is made, the legislation permits HMRC to make a nomination.

The nominated partner, or where appropriate his or her successor, will be responsible for dealing with any matters arising from an enquiry into the partnership return. He or she will also be responsible for keeping the other partners informed of the progress of any enquiry.

The concept of the nominated partner ensures that the majority of HMRC’s interactions with a partnership are via a single point of contact.

Requests for HMRC Information

You may receive a request for information about a business partnership from one of four parties:

  • The ‘nominated partner’ of an existing business partnership
  • A ‘general’ partner (whether they are the nominated partner or not) of an existing business partnership
  • An ex-partner (whether they were the nominated partner or not) of an existing business partnership
  • An ex-partner (whether they were the nominated partner or not) of a dissolved business partnership.

The next section explains the procedures for dealing with each type of disclosure request. Procedure for disclosing information

Nominated partners

You may disclose any information about the business partnership’s tax affairs to the nominated partner.

General Partners

Except for Scotland, all partners, may be supplied with direct tax and VAT information that relate to the period when they were a member of the partnership.

They are entitled to:

  • A copy of the partnership return,
  • A copy of the accounts for a year throughout which they were a member of the partnership,
  • A copy of the partnership statement,
  • A copy of any correspondence relating to the computation of the profits,
  • Information in respect of the partnership’s VAT affairs, including any correspondence that has been entered into by any of the other partners about those affairs.

They are not entitled to:

  • A copy of the accounts for any year in which they were not a partner,
  • Any details of their partners’ personal allowances or other income,
  • Any correspondence relating to any matter personal to their partners, or
  • VAT information only relevant to a period during which they were not a partner.

In Scotland, HMRC may disclose information about the business partnership’s direct tax affairs as above, but may only disclose VAT information to the current partners.

An ex-partner of an existing partnership may be supplied with the information set out above, for the time they were a partner.

In Scotland ex-partners of existing partnerships are not entitled to any information about the VAT affairs of the partnership regardless of whether they were a partner during the period in question. The exception to this is where a current partner has provided their express written consent stating that HMRC may disclose information to the ex-partner. For more guidance on obtaining consent, please see IDG30210.

Ex-partners of dissolved partnerships

Except for in Scotland, HMRC may disclose both direct tax and VAT information to an ex-partner of a dissolved partnership if they were a partner during the period in question. Before making the disclosure you must ensure that the requested information does not contain details of any matters personal to the other ex-partners.

In Scotland, HMRC may disclose direct tax information to an ex-partner of a dissolved partnership if they were a partner during the period in question. However, VAT information can only be disclosed to the ex-partner with the consent of all ex-partners.

If the consent of all ex-partners is not available, the ex-partner who has made the request must provide HMRC with any consent that is available. He or she must also provide reasons why the consent of all ex-partners has not been provided.

Limited Liability Partnerships

Please note that this guidance does not apply to Limited Liability Partnerships, which are separate legal entities, and treated like any other company.