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Business Partnership

Partnerships

A partnership enables you to start a business with people with relevant skills and knowledge that are different to yours. It allows you to focus on what you do best.

For example, you may be very talented in producing a product or a service that uses your skills, but have no hands-on experience of running a business. If so, you may want to work with someone who has business and management skills who can look after things like financial planning and recruitment.

A partnership can involve several partners.

In a business partnership:

Tax responsibilities

The partnership must:

All the partners must:

The partnership will also have to register for VAT if you expect its takings to be more than £82,000 a year.

You can set up a limited partnership or limited liability partnership if partners don’t want to be personally responsible for a business’ losses.

A partner doesn’t have to be an actual person. For example, a limited company counts as a ‘legal person,’ and can also be a partner in a partnership.

Registering your partnership

The nominated partner must inform HM Revenue and Customs (HMRC) of the business partnership and register for Self Assessment tax returns and Class 2 National Insurance for all partners at the same time.

Allow 10 working days to complete the registration process because HMRC needs to post you an activation code. You’ll be prompted for this when you first log in to your online account (also known as a Government Gateway account).

Useful links:

Growth Hub providers – help with setting up a business partnership.

Gov.uk – details on how to register your business partnership.

Gov.uk  - register for VAT.

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