EM7521 - Partnerships: SA and partnerships: partnership tax returns

TMA 70/S8(1B)
TMA 70/S12AA
TMA 70/S12AB

Partnerships don’t pay tax, the partners do. A partnership return is required simply for the purpose of establishing the amount in which each partner is liable to tax.

The partnership return includes all the information required to calculate the profits arising from any partnership business, including any claims (such as capital allowances) that must be taken into account when calculating the profits of that business. It also includes details of any partnership investment income and information on the disposal of partnership assets which might give rise to a chargeable gain or an allowable loss to the partners.

A partnership return must also include a partnership statement. The partnership statement shows each partners share of the partnerships income, consideration, loss, tax credit or charge. The partners must enter the same figure in their personal return.

The partnership return is subject to similar rules regarding repair/correction of obvious errors by an officer of HMRC or amendment by the partnership, as apply to individual returns. See guidance at EM7527 for amendments and EM7528 for corrections.

Where a partnership return is either corrected by HMRC, or amended by the partnership, corresponding changes must be made to the individual partners' return. In either case, this is done by giving a notice to each of the partners to amend their return.

It’s important to note that, under statute, it’s the notice itself that amends the return. That is why the notices are written in the past tense, as the amendment is made when the notice is issued.

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