Accountants for Partnerships

Accountants for partnerships
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    Partnerships are complicated. The right partnership accounting services can drive business growth by ensuring compliance, maximising financial efficiency, and saving time.

    Butt Miller Chartered Accountants for Partnerships

    Our many years of experience in partnership accounting and tax compliance give us a vast knowledge base to help you choose the right partnership accounting package. Whether you already have an agreement in place or need help finalising the details, as your dedicated accountant, we’ll be with you at every step.

    Our service goes beyond setting up your partnership. We can support with a wide range of accountancy services, including bookkeeping, VAT, tax returns and compliance matters.

    Contact us today to learn more about our partnership accounting services.

    What are business partnerships?

    A partnership is a legal arrangement where two or more people share responsibility for a business.

    Multiple partners complicate running a business, so ideally, there will be written terms for how the partners will operate. These terms may include how to add new partners, remove partners, and guidance on the decision-making process.

    Our experienced accountants can help you navigate the partnership process right from the outset. By working alongside you to set up an agreement for your new partnership, we’ll help save you time and money and ensure your business’s long-term success.

    There are three different types of partnerships.

    1) General Partnership

    In a traditional partnership, each partner shares both profits and liabilities, and the members themselves have unlimited liability. This means that all individuals are responsible for any debts and contracts and will be equally personally liable if the business gets into financial difficulties, even if it is the fault of only one member.

    In the absence of a partnership agreement, profits are shared equally under the Partnership Act 1890.

    2) Limited Liability Partnership (LLP)

    A limited liability partnership is a typical setup for corporate practices such as accountants and lawyers. As the name suggests, this structure limits the liability of the individual partners in the same way that a limited company does, i.e. the partners are only liable for the amounts they originally invested in the business.

    An LLP exists as a separate legal entity from its members.

    3) Limited Partnership

    In this hybrid structure, at least one partner must have unlimited liability where they are solely responsible for the partnership’s debts. There must also be another partner whose liability is limited to the amount they originally invested. Any additional partners can choose to be limited or not.

    Both limited partnerships and limited liability partnerships must register and file their accounts at Companies House.

    How does partnership accounting work?

    Accounting for a business partnership works the same as any other business. Income and expenses make up the return, and the balance sheet will report any business-owned assets.

    Partnership tax returns must be filed annually by 31 January (if submitted electronically) or by 31 October (if submitted by paper). They are based on income arising during the relevant tax year, which runs from 6 April to 5 April.

    The resulting income on the partnership tax return is split between the individual members, who then report their share on their personal tax returns and pay tax on their share of the income on the same basis as sole traders.

    Each partner is liable for their own personal tax liability, including interest on late payments.

    Our accounting services for partnership businesses

    Butt Miller offers a range of partnership accountancy services, providing expertise and support for various financial needs, including bookkeeping, partnership tax returns or financial planning.

    Rather than wasting time delegating financial tasks between your partners, you can regain some of your valuable time and rest easy knowing that your partnership accounting is in good hands.

    Bookkeeping

    All partnerships must keep transaction records to complete the accounts and Partnership Tax Return at the end of the tax year. Our skilled team of partnership accountants will handle the bookkeeping process on your behalf, ensuring your records are organised and up to date.

    We’ll also implement the most suitable cloud accounting software for your partnership business. This will not only help you better prepare for HMRC but also enable your partners and us to work collaboratively on your accounts at any time.

    Payroll

    If your partnership business thrives on the continuous contribution of your employees, then payroll is extremely important. Seamless payroll processes ensure employees are paid accurately and on time, keeping them loyal and engaged, ultimately fueling your business growth.

    We’ll take care of the various payroll tasks, including wage calculations, tax deductions, and timely payments for your team so that you can focus on the front-end needs of your business.

    VAT

    When running a partnership business, only the business itself needs to register for VAT once its taxable turnover reaches £90,000 (from 1 April 2024). Our team will guide you through the complexities of VAT for partnerships. We’ll help you determine when to apply, assist with the single registration process, and explore ways to minimise your VAT liability.

    Partnership Tax Return

    Tax returns tend to work differently in a partnership than in other business setups. This is because only one partner has to be responsible for the tax return for a partnership (SA800), which reports the business’s income, expenses, profits and losses. Then, each partner must include their share of the partnership’s profits on their own personal tax return.

    Essentially, the business owners will pay tax as if they are self-employed. They will also be required to pay Class 2 and 4 National Insurance based on their share of the profits.

    We’ll help you avoid any potential issues or financial penalties by ensuring your tax returns are filed accurately and on time.

    Why choose Butt Miller as your partnership accountant?

    As experienced accountants for partnerships, Butt Miller offers a range of partnership accounting and bookkeeping services to assist your business and its associated partners. From helping you navigate registration to ensuring accurate and timely tax returns, our team is here to fuel your success.

    We’ll also keep you up-to-date on any changes to tax regulations that may affect your business and find innovative solutions to keep your business ahead of the game.

    Get in touch today and discover how our expert partnership accounting services can be fully tailored to your business.

    Frequently asked questions about accounting for partnerships

    If you’re considering the support of a skilled partnership accountant but want to learn more before getting in touch, please take a look at some of the most frequently asked questions below.

    Does Butt Miller deal with partnership agreements?

    Absolutely! While partnerships are relatively easy to establish, time and care must be taken to ensure a sustainable setup and avoid any future problems. At Butt Miller, we’ll help you understand the various aspects of setting up a partnership agreement and what you will need to consider for accounting purposes.

    Does a partnership need to prepare financial statements?

    Whether or not you need to prepare formal accounts depends on how your partnership is set up and what activities they are involved in.

    LLPs must file annual accounts with Companies House in the same way that a limited company does. The partnership tax return is based on those accounts and must be filed with HMRC by the usual Self-Assessment deadlines.

    There is no legal requirement for a general partnership to file annual accounts. However, HMRC will still expect tax returns even without partnership accounts.

    Do I need to register a partnership with HMRC?

    You must register a business partnership with HMRC. One partner is responsible for registering with HMRC and sending the partnership tax return on behalf of the partnership. However, the remaining partners will also be required to register for Self-Assessment individually and submit their own tax returns.

    How many business partners can a partnership have?

    A partnership consists of two or more parties, and there is no upper limit to the number of partners. A partnership will always have more than one owner, and in no circumstances will there be fewer.

    At Butt Miller, we’ll help you determine which business partnership setup is right for your company and provide expert advice on the legal and tax implications involved. We’ll ensure your business partnership is set up with compliance and success at the forefront.

    Get in touch today
    If you would like advice and you are interested in our accounting services please call, email or complete our website contact form:

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    Who we help at Butt Miller

    We provide many different businesses with outsourcing solutions to help make bookkeeping and financial reporting simple. Our outsourced finance function is backed by sector specific experts who sit behind the scenes, crunching the numbers and providing valuable advice and insight.

    We are able to offer support across a number of different industries ranging from:

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