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Partnerships

The deadlines and processes for partnership accounts and tax returns are similar to a sole trader. The main differences are:

  • The partnership profit needs to be split between partners. For the partners’ peace of mind as much as for the benefit of HMRC, the partners really should have written agreement of the splitting of profit.
  • Each member of the partnership and the partnership itself will need to submit tax returns. So a partnership with 3 partners will need to submit 4 returns.

One partner should be nominated to represent the partnership. Note that although the partnership submits a tax return, the partnership itself is not subject to income tax. It is the partners that are taxed on their shares of the profit.

Subcontractors in the Construction Industry Scheme

Nearly all subcontractors engaged in construction are covered by the Construction Industry Scheme (CIS). For this purpose the definition of “construction” is extremely board. For example, landscape gardening on the new build is deemed to be construction. HMRC guidelines provide further details.

The CIS is a method of collecting income tax but does not remove the need to maintain proper financial records. Sub-contractors are sole traders (or, less often, partners or limited companies) and must submit tax returns like any other business. Apart from avoiding penalty charges from HMRC, there is often a big incentive for submitting the returns; if your earnings before CIS deductions are less than £25,000, you are probably due a significant tax rebate.

Benefits of Using an Accountant

You can complete your accounts and tax returns yourself; you do not have to use an accountant. Whilst you will save some money this can be a false economy. An accountant will provide some very real benefits. They will:

  • Make sure you claim all permissible expenses and allowances, helping to minimise your tax bill
  • Calculate tax correctly; HMRC can impose penalties for incorrect returns, even if the mistakes are entirely innocent
  • Remind you when returns are due
  • Deal with HMRC on your behalf and make sure they treat you fairly
  • Ensure you comply with requirements. You must take due care in preparation of your accounts and tax returns; using a properly qualified goes a long way towards achieving this
  • Create business plans to help grow your business
  • Provide the evidence needed to support applications for mortgages or other business loans

Sole Traders

From £59 per month

Simplicity and complete accounting support for an unbeatable price

Limited Companies

From £79 per month

Expert accountancy assistance for your growing business enterprise

Partnerships

From £69 per month

This is the same pricing as Sole Traders, except extra charges for 2 or more partners.