Who this is for
This page is for people running a business together as a partnership in and around Birmingham: family businesses, professional practices, trades run by two or more people, and ventures where several partners share the profit and the risk. It suits partnerships that want the business return and every partner’s personal return handled as one connected job, rather than by different hands that never quite agree. If you share a business and want the figures to be clear and consistent for everyone, this is aimed at you.
How we help partnerships
We treat the partnership and its partners as one linked picture and keep them in step. That starts with tidy bookkeeping for the business, feeding into the partnership accounts and the partnership tax return. From the agreed profit share we then prepare each partner’s Self Assessment return, so personal and business figures reconcile rather than conflict. We handle the tax side across the whole arrangement and, where the partnership is registered, run the VAT returns too. Throughout, we apply your profit-sharing basis consistently so no partner is left guessing how their share was worked out.
What’s included
- Keeping the partnership’s bookkeeping organised through the year
- Preparing the partnership accounts from those records
- Preparing and filing the partnership tax return
- Allocating profit between partners on the agreed basis
- Preparing each partner’s individual Self Assessment return
- Making sure partnership and personal figures reconcile
- Preparing and filing VAT returns where the partnership is registered
- Working through the numbers when a partner joins or leaves
Common questions we hear
The questions partnerships bring us most are about how profit is split, why every partner still needs their own return, and how to keep the business and personal figures from drifting apart. Changes in the partners (someone joining, retiring or leaving) raise their own questions about capital and allocation. We are glad to talk any of these through against your partnership agreement and actual figures, so everyone involved sees the same clear picture.
Serving Birmingham and the Midlands
We act for partnerships across Birmingham and the wider Midlands through cloud accounting software, so partners in different places can share records and see the same numbers without paper changing hands. Wherever the partners are based in the region, the process is the same, and we can arrange a call when the profit share or a change in the partnership needs discussing together.
Common questions
How is a partnership taxed?
The partnership itself does not pay Income Tax. Instead it files a partnership return showing the profit, which is then allocated to the partners, and each partner pays tax on their share through their own Self Assessment. We prepare the partnership return and each partner's return so the figures reconcile across the whole picture.
How is profit split between partners?
Usually according to your partnership agreement, which might share profit equally or in agreed proportions, sometimes after salaries or interest on capital. If there is no clear agreement, disputes can follow. We apply the agreed basis consistently and set out each partner's share clearly so everyone sees how their figure was reached.
Does every partner need their own tax return?
Yes. Alongside the partnership return, each partner completes their own Self Assessment reporting their share of the profit plus any other personal income. It is easy for these to drift out of line if handled separately. We prepare them together so each partner's return matches the partnership figures.
Does the partnership need to register for VAT?
Only once the partnership's taxable turnover reaches the registration threshold, though voluntary registration is possible. The partnership registers as a single entity rather than each partner separately. We monitor turnover, tell you when registration is approaching and run the VAT returns once you are registered.
What happens when a partner joins or leaves?
A change in the partners affects the profit allocation, the capital accounts and sometimes the return itself, and it should follow what the partnership agreement says. Handled loosely, it causes confusion later. We work through the numbers on a change so the accounts and each partner's position stay accurate.