Partnerships themselves aren’t taxed. Instead, the income generated by the partnership is divided among the partners according to the terms of the partnership agreement, and each partner is taxed on their share of the profits.

Because the partnership's profits can be divided in any manner agreed upon, each partner earns a portion of the profits. These earnings are taxed at the same rates and bands as self-employed income (basic, higher, and additional rate).

For example, if partners A, B, and C are sharing a £100,000 annual profit, and their stakes are 60%, 25%, and 15% respectively, Partner A would be taxed on £60,000, Partner B on £25,000, and Partner C on £15,000. Consequently, Partner A would likely fall into a higher Income Tax rate compared to partners B and C, who might fall into the basic rate (as of 2021/22).

If any partners have additional sources of income, their total earnings may push them into higher tax brackets. HMRC calculates taxable income by combining all sources of earnings and then subtracting deductions and allowances.

The filing deadlines for partnership tax returns align with those for Self Assessment:

• Digital Submissions: Due by midnight on January 31st.
• Paper Filings: Due by October 31st, three months earlier.

The first reporting period covers from your start date to April 5th. For instance, for the 2020/21 tax year, you need to file online by January 31, 2022.

If you miss the deadline, each partner will be immediately fined £100. Penalties accrue similarly to late Self Assessment tax returns and affect each partner individually, rather than the partnership as a whole. Additional charges will apply if the payment is further delayed.

As a partnership, you'll need to complete several pages of the SA800 form. The nominated partner is responsible for this task.

Here are the steps and details:

1. Complete the SA800 Form:
   • Fill out the main eight pages of the SA800 form. This is the responsibility of the nominated partner.
2. Supplementary Pages:
   • Include supplementary pages for specific types of income, such as bank or building society profits and the disposal of chargeable assets.
3. Gather Evidence:
   • Collect the most recent and accurate evidence of all incomes and investments, as HMRC may request documentation.
4. Choose the Appropriate Partnership Form:
   • SA104S: Use this short version if your trading income is less than £85,000.
   • SA104F: Use this full version if your partnership income exceeds £85,000 or if you have more complex partnership arrangements.
5. Partner Consent:
   • All partners must sign a document to give their consent.
   • A copy of this signed document should be included with each partner's personal Self Assessment tax filings.

By following these steps, you ensure that your partnership tax return is filed correctly.

Every tax partnership in the United Kingdom must file a tax return by the set deadline, either on paper or electronically. Missing the deadline results in an automatic fine from HMRC. However, you can request a reduction or cancellation of the penalty if you have a valid reason. You have 30 days to explain your late submission. Valid reasons include:

• HMRC's service was down, or your software had issues when you tried to submit.
• Theft, fire, or flooding prevented you from sending it.
• A serious illness prevented you or your partners from completing their portion of the tax return.
• One of the partners passed away shortly before the deadline.
• Postal delays affected your submission.

If any of these reasons apply to you and your partnership tax return was late, you may succeed in appealing against late filing penalties.