SAM100137 - Records: set up taxpayer record: registration of partnerships and partners
A partnership is the relationship between persons ‘carrying on a business’. There are different types of partnership
- Ordinary partnerships
- Limited liability partnerships (LLP)
- Limited partnerships (LP)
All partnerships need to be registered for self assessment (SA).
The nominated partner is the partner who has agreed to receive and submit the partnership returns and is also required to register the partnership. See subject ‘Maintain Taxpayer Record: Nominated Partner’ (SAM101290).
Registration for SA purposes is complete when a unique taxpayer reference (UTR) is allocated. This is the ten-digit number shown on HMRC correspondence and both the partnership and each partner must be allocated their own UTR. (No-one should have more than one UTR).
Where the partner is an individual not already registered for Class 2 National Insurance Contributions (NICs), registration for Class 2 NICs will be made from the information supplied on form SA401. There is no requirement to notify either the partnership itself for Class 2 NIC or any partner who is not an individual.
Separate notifications will be required for other taxes administered by HMRC such as PAYE, VAT and CIS.
Failure to notify and interaction with registration for SA where each partner is concerned
Overseas aspects of partnership registration for SA
Foreign partnerships - all activities entirely outside UK
A UK resident partner of a foreign partnership not required to register for SA
Missing UTRs for non-UK resident partners where registration has not been completed
British Venture Capital Association (BVCA) cases
Missing UTRs for UK resident partners who should have already registered for SA
Alternative filing process for investment partnerships for returns filed on or before 15 March 2018
Alternative filing process for investment partnerships for returns filed after 15 March 2018
Failure to notify and interaction with registration for SA where each partner is concerned
This guidance in respect of penalties and surcharges relates to 2009-10 tax years and earlier. Guidance for 2010-11 and later tax years, can be found at SAM61200 onwards.
The time limit for notifying chargeability for SA is 6 months from the end of the tax year in which tax liability arises. For example for tax year 2009-2010, if this notification is not received on or before 5 October 2010 a penalty for failure to notify may apply. The notification can simply be made by letter. However, the penalty cannot exceed the amount of tax and / or Class 4 NICs outstanding at 31 January 2011.
Consequently, if all tax and NIC liabilities are paid by 31 January, any penalty for a failure to notify is reduced to zero. When an SA return is issued upon registration, a three-month period is allowed for completion and return to HMRC. If the three-month date falls after 31 January, then the due date for payment of the income tax due is similarly extended.
Overseas aspects of partnership registration for SA
If a partnership’s business is carried on wholly or partly in the UK or if land in the UK owned by the partnership is rented out, it will need to register and obtain a UTR. Likewise, if a foreign entity is a member of a UK partnership, it will also need a UTR. Note: There may also be a need to notify for other tax purposes.
Foreign partnerships - all activities entirely outside UK
Provided there is no UK presence or activity, there is currently no requirement for any partnership to register with HMRC.
A UK resident partner of a foreign partnership not required to register for SA
Where in a case within the paragraph above there is no requirement to register the foreign partnership for SA, a UK resident partner will need to enter their own UTR as the partnership reference number - currently box 2 on the partnership pages of the return for an individual. This will facilitate inclusion of their share of the foreign partnership profits on the partnership supplementary pages of the SA100. Helpsheet 380 is available.
Missing UTRs for non-UK resident partners where registration has not been completed
Partnership returns need to show valid UTRs for all partners in the partnership statement. Requests to set up a partner and so obtain a UTR should be made using:
- Form SA401 for an individual
- Form SA402 for a partner who is not an individual
(Form SA400 is relevant for setting up the partnership itself)
Completed forms should be sent to:
National Insurance Contributions & Employer Office
Self Employment and Self Assessment Registrations
Benton Park View
Newcastle upon Tyne
NE98 1ZZ
Further HMRC guidance on this subject is available for customers (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
British Venture Capital Association (BVCA) cases
A spreadsheet with the SA401/SA402 information can be submitted to CAAT but must be in the format described in the following spreadsheet instructions.
The spreadsheets need to be signed by the nominated partner and the smallest font size used should be Times New Roman 12 point. The spreadsheets must be sent in paper form to the following address
National Insurance Contributions & Employer Office
Self Employment and Self Assessment Registrations
Benton Park View
Newcastle upon Tyne
NE98 1ZZ
There are four different spreadsheets covering four different scenario’s and they should be kept as separate spreadsheets. The information required on each spreadsheet is as follows:-
Spreadsheet 1 - Title: Investment partnership UK resident individuals
Mandatory sub headings:
Name of partnership for HMRC purposes
Address of partnership for HMRC purposes
The partnership’s Unique Taxpayer Reference (UTR)
Mandatory columns on the spreadsheet to contain relevant and available data for each partner:
Surname
First Name
Date of birth
National Insurance Number
Address
UTR
Date of joining partnership
Other information (column to be left empty initially)
Spreadsheet 2 - Title: Investment partnership UK resident ‘other entity’
Mandatory sub headings:
Name of partnership for HMRC purposes
Address of partnership for HMRC purposes
The partnership’s Unique Taxpayer Reference (UTR)
Mandatory columns on the spreadsheet to contain relevant and available data for each partner:
Full legal name
Type of entity (company, partnership and so on)
KYC address
UTR
Company Registration Number (CRN) (where the partner is another LLP or LP)
Pension Scheme Reference Number (if the partner is a registered pension scheme)
Date of joining partnership
Other information (column to be left empty initially)
Spreadsheet 3 - Title: Investment partnership non UK resident individuals
Mandatory sub headings:
Name of partnership for HMRC purposes
Address of partnership for HMRC purposes
The partnership’s Unique Taxpayer Reference (UTR)
Mandatory columns on the spreadsheet to contain relevant and available data for each partner:
Surname
First Name
Date of birth
NINO
Address
UTR
Date of joining partnership
Other information (column to be left empty initially)
Spreadsheet 4 - Title: Investment partnership non resident ‘other entity’
Mandatory sub heading:
Name of partnership for HMRC purposes
Address of partnership for HMRC purposes
The partnership’s Unique Taxpayer Reference (UTR)
Mandatory columns on the spreadsheet to contain relevant and available data for each partner:
Full legal name
Type of entity (company, partnership and so on)
KYC address
UTR
Date of joining partnership
Other information (column to be left empty initially)
Missing UTRs for UK resident partners who should have already registered for SA
Confidentiality and data security concerns prevent HMRC advising UTRs to anyone other than the customer, unless an authority or form 64-8 is in place.
In some circumstances, it may not be possible to obtain the UTR for every partner. Where a customer can show they have made every effort to establish the missing UTR and this has been unsuccessful, the evidence and the partnership return should be sent to the same address as above quoting the same reference.
Prior to February 2009, substitute UTRs were allowed in some cases but that practice ceased at that date.
Alternative filing process for investment partnerships for returns filed on or before 15 March 2018
An alternative process may be used in cases where a partnership with investment business has not obtained UTR’s for its non-UK resident partners under the above process.
The alternative process applies only where a UTR is required for the purposes of filing a partnership return and the following circumstances apply:
- The partnership carries on an investment business
- The partner is a non-UK resident individual partner in the partnership
- No UTR has been obtained for the partner under the above process
- The partner has no UK tax liability
- The partner return provides the correct name and address of the partner
The partnership can use the UTR 57754 43954 in the partnership return for non-UK resident investment partners who meet all these conditions.
Partners are still required to obtain a UTR and include it in their tax return, where applicable. The alternative filing process cannot be used by partners.
Alternative filing process for investment partnerships for returns filed after 15 March 2018
There is no requirement for a partnership return to include a specific UTR for each non-UK resident partner if:
- The person is not chargeable to income tax or corporation tax for the period, or for a period which includes any part of the period, in respect of which the partnership return is made
- The partnership does not carry on a trade or profession or a UK property business at any time during the period in respect of which the partnership return is made
- The whole of that period is a period in respect of which the partnership is required to set out information about the person in one or more relevant returns*, and
-
The partnership return includes a statement that the condition in para c is met.
- Relevant return means a return under the International Tax Compliance Regulations 2015.
The International Tax Compliance Regulations require the reporting of information in relation to arrangements entered into by the United Kingdom with another territory for the exchange of tax information for the purposes of the adoption and implementation of the Common Reporting Standards. See s,12ABZA TMA 1970.
The partnership must however use the generic UTR 77991 91223 in the partnership return for each non-UK resident investment partner who meets all these conditions in order to indicate that s,12ABZA applies. See PM145140.
For those partnerships that have partners that fall into the following categories an alternative UTR is available for these partnerships to use if they meet certain conditions:
- Partners other than reportable jurisdiction persons, which include:
i. a corporation the stock of which is regularly traded on one or more established securities markets;
ii. any Related Entity [as defined in the OECD Common Reporting Standard] of such a corporation;
iii. a Governmental Entity;
iv. an International Organisation;
v. a Central Bank; or
vi. a Financial Institution
Guidance can be found at IEIM402010
- Partners who are resident in jurisdictions that are non-reportable jurisdictions and therefore do not provide reportable accounts (Guidance can be found at IEIM402340)
- Partners who meet the CRS threshold exemption for reports (Guidance can be found at IEIM403260)
For the above partners to qualify to use alternative UTRs they must meet the following conditions:
1. s12ABZA (1) (a) and (b) TMA 1970:
(a) The person is not chargeable to income tax or corporation tax for the period, or for a period which includes any part of the period, in respect of which the partnership return is made,
(b) The partnership does not carry on a trade or profession or UK property business at any time during the period in respect of when the partnership return is made.
2. Provide HMRC with a foreign Tax Identification Number (TIN) (Guidance can be found on TINs at IEIM402040) for the partner and the name of the country they are tax resident in. If the partner is dual resident then the partnership should provide both TINs and the countries that provided the references. For the time being, this will be accepted by HMRC on a specified spreadsheet which must also be attached as a PDF to the partnership return.
If any partners have no country of residence or no TIN then the partnership will need to provide another local registration number provided by the jurisdiction the partner is tax resident in. This would include company registration numbers, pension scheme reference number etc.
In the rare instance a partner has no reference number, the partnership will be expected to detail why this is the case in the relevant box.
If the partnership meets the above conditions, when completing the partnership statement the same information is still required but the relevant UTR below should be used:
- Partners other than reportable jurisdiction persons - 8574787496
- Non CRS and FATCA jurisdiction- 5876665438
- Threshold exemption- 3972584505
For those partners that use the alternative UTRs but do not fall in one of the categories and/or do not meet the specified conditions we will treat the partnership return as incorrect, which may give rise to penalties and interest.
In the instances no reference number is given, the partnership must have done the relevant due diligence to have identified a reference number. If HMRC have reason to believe that due diligence has not been performed then the partnership return will be treated as incorrect, which again may give rise to penalties and interest.