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HMRC internal manual

Self Assessment Manual

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HM Revenue & Customs
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Records: set up taxpayer record: registration of partnerships and partners

A partnership is the relationship between persons ‘carrying on a business’. There are different types of partnership

  • Ordinary partnerships
  • Limited liability partnerships (LLP)
  • Limited partnerships (LP)

All partnerships need to be registered for self assessment (SA).

The nominated partner is the partner who has agreed to receive and submit the partnership returns and is also required to register the partnership. See subject ‘Maintain Taxpayer Record: Nominated Partner’ (SAM101290).

Registration for SA purposes is complete when a unique taxpayer reference (UTR) is allocated. This is the ten-digit number shown on HMRC correspondence and both the partnership and each partner must be allocated their own UTR. (No-one should have more than one UTR).

Where the partner is an individual not already registered for Class 2 National Insurance Contributions (NICs), registration for Class 2 NICs will be made from the information supplied on form SA401. There is no requirement to notify either the partnership itself for Class 2 NIC or any partner who is not an individual.

Separate notifications will be required for other taxes administered by HMRC such as PAYE, VAT and CIS.

Failure to notify and interaction with registration for SA where each partner is concerned

This guidance in respect of penalties and surcharges relates to 2009-10 tax years and earlier. Guidance for 2010-11 and later tax years, can be found at SAM61200 onwards.

The time limit for notifying chargeability for SA is 6 months from the end of the tax year in which tax liability arises. For example for tax year 2009-2010, if this notification is not received on or before 5 October 2010 a penalty for failure to notify may apply. The notification can simply be made by letter. However, the penalty cannot exceed the amount of tax and / or Class 4 NICs outstanding at 31 January 2011.

Consequently, if all tax and NIC liabilities are paid by 31 January, any penalty for a failure to notify is reduced to zero. When an SA return is issued upon registration, a three-month period is allowed for completion and return to HMRC. If the three-month date falls after 31 January, then the due date for payment of the income tax due is similarly extended.

Overseas aspects of partnership registration for SA

If a partnership’s business is carried on wholly or partly in the UK or if land in the UK owned by the partnership is rented out, it will need to register and obtain a UTR. Likewise, if a foreign entity is a member of a UK partnership, it will also need a UTR. Note: There may also be a need to notify for other tax purposes.

Foreign partnerships - all activities entirely outside UK

Provided there is no UK presence or activity, there is currently no requirement for any partnership to register with HMRC.

A UK resident partner of a foreign partnership not required to register for SA

Where in a case within the paragraph above there is no requirement to register the foreign partnership for SA, a UK resident partner will need to enter their own UTR as the partnership reference number - currently box 2 on the partnership pages of the return for an individual. This will facilitate inclusion of their share of the foreign partnership profits on the partnership supplementary pages of the SA100. Helpsheet 380 is available.

Missing UTRs for non-UK resident partners where registration has not been completed

Partnership returns need to show valid UTRs for all partners in the partnership statement. Requests to set up a partner and so obtain a UTR should be made using:

  • Form SA401 for an individual
  • Form SA402 for a partner who is not an individual

(Form SA400 is relevant for setting up the partnership itself)

Completed forms should be sent to:

National Insurance Contributions & Employer Office
Self Employment and Self Assessment Registrations
Benton Park View
Newcastle upon Tyne
NE98 1ZZ

Further HMRC guidance on this subject is available for customers (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

British Venture Capital Association (BVCA) cases

A spreadsheet with the SA401/SA402 information can be submitted to CAAT but must be in the format described in the following spreadsheet instructions.

The spreadsheets need to be signed by the nominated partner and the smallest font size used should be Times New Roman 12 point. The spreadsheets must be sent in paper form to the following address

National Insurance Contributions & Employer Office
Self Employment and Self Assessment Registrations
Benton Park View
Newcastle upon Tyne
NE98 1ZZ

There are four different spreadsheets covering four different scenario’s and they should be kept as separate spreadsheets. The information required on each spreadsheet is as follows:-

Spreadsheet 1 - Title: Investment partnership UK resident individuals

Mandatory sub headings:

Name of partnership for HMRC purposes
Address of partnership for HNRC purposes
The partnership’s Unique Taxpayer Reference (UTR)

Mandatory columns on the spreadsheet to contain relevant and available data for each partner:

Surname
First Name
Date of birth
National Insurance Number
Address
UTR
Date of joining partnership
Other information (column to be left empty initially)

Spreadsheet 2 - Title: Investment partnership UK resident ‘other entity’

Mandatory sub headings:

Name of partnership for HMRC purposes
Address of partnership for HMRC purposes
The partnership’s Unique Taxpayer Reference (UTR)

Mandatory columns on the spreadsheet to contain relevant and available data for each partner:

Full legal name
Type of entity (company, partnership and so on)
KYC address
UTR
Company Registration Number (CRN) (where the partner is another LLP or LP)
Pension Scheme Reference Number (if the partner is a registered pension scheme)
Date of joining partnership
Other information (column to be left empty initially)

Spreadsheet 3 - Title: Investment partnership non UK resident individuals

Mandatory sub headings:

Name of partnership for HMRC purposes
Address of partnership for HMRC purposes
The partnership’s Unique Taxpayer Reference (UTR)

Mandatory columns on the spreadsheet to contain relevant and available data for each partner:

Surname
First Name
Date of birth
NINO
Address
UTR
Date of joining partnership
Other information (column to be left empty initially)

Spreadsheet 4 - Title: Investment partnership non resident ‘other entity’

Mandatory sub heading:

Name of partnership for HMRC purposes
Address of partnership for HMRC purposes
The partnership’s Unique Taxpayer Reference (UTR)

Mandatory columns on the spreadsheet to contain relevant and available data for each partner:

Full legal name
Type of entity (company, partnership and so on)
KYC address
UTR
Date of joining partnership
Other information (column to be left empty initially)

Missing UTRs for UK resident partners who should have already registered for SA

Confidentiality and data security concerns prevent HMRC advising UTRs to anyone other than the customer, unless an authority or form 64-8 is in place.

In some circumstances, it may not be possible to obtain the UTR for every partner. Where a customer can show they have made every effort to establish the missing UTR and this has been unsuccessful, the evidence and the partnership return should be sent to the same address as above quoting the same reference.

Prior to February 2009, substitute UTRs were allowed in some cases but that practice ceased at that date.

Alternative filing process for investment partnerships

An alternative process may be used in cases where a partnership with investment business has not obtained UTR’s for its non-UK resident partners under the above process.

The alternative process applies only where a UTR is required for the purposes of filing a partnership return and the following circumstances apply:

  • The partnership carries on an investment business
  • The partner is a non-UK resident individual partner in the partnership
  • No UTR has been obtained for the partner under the above process
  • The partner has no UK tax liability
  • The partner return provides the correct name and address of the partner

 

The partnership can use the UTR 57754 43954 in the partnership return for non-UK resident investment partners who meet all these conditions.

Partners are still required to obtain a UTR and include it in their tax return, where applicable. The alternative filing process cannot be used by partners.