Self Assessment for partnerships: the partnership return: requirements
As discussed at PM10900, a partnership return is required in order to determine the profits on which partners will be taxed. The return will need to show the partnership’s income and expenses for the accounting period(s) ended in the relevant tax year (6 April to 5 April). An accounting period is the period for which the business draws up its accounts. This will normally be a 12 month period unless there has been a change in accounting date. It is possible, on a change of accounting date, for a business to have no accounting period ending in the relevant tax year. In this case, the partnership return should show income and expenses falling within the actual tax year (6 April to 5 April). HMRC recommends that this situation is avoided by ensuring that there is at least one accounting date per tax year.
The return is issued to the partnership with a notice requiring the partner indentified in that notice (the nominated partner) to complete the tax return. Further guidance on what information is required is available at SALF503. The return must be signed by the nominated partner (or his/her successor) to be regarded as complete.
A return will also be treated as incomplete if it does not include the name, address and tax reference (UTR) of each partner in the partnership. Failure of an individual to obtain a UTR prior to the filing date for the partnership tax return may not be regarded as a reasonable excuse for not filing a complete return. This is because the individual partner has a duty to notify HMRC of his or her chargeability. Guidance on registration of partnerships and partners is at SAM100137.
The partnership return must include a partnership statement showing:
- the total income, losses, credits and charges of the partnership for each period of account ending in the return period,
- each partner’s share of that income, loss, credit or charge.
Further guidance on computing the partnership’s taxable profits is available at PM30000 onwards.
Details of any disposals of chargeable business assets owned by the partnership must also be included in the return, including how the gains or losses have been allocated to the partners.
Please note that more than one partnership statement may be required if the partnership has more than one accounting period ending within the same tax year.