Registering a Business Partnership
In a partnership, each partner needs to register individually for Self Assessment. This applies to general partnerships, limited liability partnerships, and limited partnerships. You’ll also need to register the partnership itself. A partnership is a business entity that must be legally formed by filing the appropriate legal documents.
One of you becomes the ‘nominated partner’ who handles the partnership’s tax returns. You’ll receive a Partnership UTR to use on tax forms.
Each partner pays income tax and National Insurance on their share of the partnership profits. This is done through their personal Self Assessment.
The partnership will need to file a Partnership Tax Return (SA800) every year. This shows how profits are divided between partners.
Consider creating a formal Partnership Agreement that clearly sets out how tax responsibilities are shared. Forming a limited liability partnership or limited partnership involves additional legal documents and registration steps. This can save arguments later!
VAT Registration: When and How
You must register for VAT in the UK if your taxable turnover exceeds £90,000 within a 12-month period. Many businesses also choose to register voluntarily to reclaim VAT on expenses.
Once registered, you’ll need to charge VAT on your goods or services and submit regular VAT returns using Making Tax Digital software.
Most businesses now need to do this using Making Tax Digital software. There are different VAT schemes available that might suit your business.
The Flat Rate Scheme can be simpler for small businesses. Remember that VAT registration affects your pricing, you’ll need to decide whether to absorb the VAT or pass it on to customers.
Other Registration Requirements to Consider
If you’re using commercial premises, you’ll need to register for business rates with your local council. Depending on your business location, you may also need to obtain permits from your local city or county authorities.
Handling customer data? You’ll likely need to register with the Information Commissioner’s Office (ICO). Some registrations may require you to provide additional information beyond the standard forms.
Taking on staff means registering as an employer with HMRC. This covers PAYE and National Insurance contributions.
Certain industries require specific licences or registrations. For example, food businesses need to register with their local authority. New businesses should also consider applying for trademark protection to secure their brand.
Don’t forget about insurance! Some types, like employer’s liability insurance if you have staff, are legally required. Insurance requirements may vary depending on your business location and the permits required by your city or county.
I learned this the hard way when starting my first consultancy. I’d registered for taxes but forgotten about ICO registration, leading to a frantic last-minute application when a client asked for proof.
