SA800 Partnership Tax Returns: key facts for freelancers
Freelancers going into business with a partner or partners can offer many benefits. You can gain from other people’s talent, ideas, knowledge, skill, contacts and cash, just as they can gain from yours. You can also share the workload, risk and responsibilities, while avoiding feelings of isolation that can happen when running a business on your own.
The UK has some 384,000 ordinary business partnerships, which is about 7% of the total business population. And whether it’s friends, family, partners, spouses or colleagues, many people continue to start and run a business with partners.
Members of ordinary business partnerships and those who rent out property through a partnership report taxable income via the SA800 Partnerships Tax Return.
In this guide, GoSimpleTax explains:
- What the SA800 is.
- Who is responsible for completing and filing it.
- Supplementary pages you may have to submit with your SA800.
- SA800 Partnership Tax Return filing deadlines and late-filing penalties.
- When and how you must pay your tax bill.
What is an “SA800”?
An SA800 Partnership Tax Return is the tax return that members of ordinary partnerships must complete and file to tell HMRC about the partnership’s income and “disposals of chargeable assets” (ie selling an asset).
As explained by HMRC in its guidance notes: “Every partnership gets the first eight pages of the Partnership Tax Return covering income from trades and professions, and interest or alternative finance receipts from banks, building societies or deposit takers. There are other ‘supplementary’ pages covering the less common types of income and disposals of chargeable assets.”
- Pages 6 and 7, of the SA800 Partnership Tax Return includes a Partnership Statement, which is where profits, losses or income allocated to the partners are summarised. There are two types of Partnership Statement:
• A short version for partnerships with trading or professional income only, or interest or alternative finance receipts from banks, building societies or other deposit takers.
• A full version SA800(PS) covering all types of partnership income.
The short Partnership Statement caters for up to three partners, while the full Partnership Statement caters for up to six.
You must also fill in the Partnership Trading pages (pages 2 to 5 of the SA800 Partnership Tax Return) if, at any time in the tax year, the partnership carried out a trade or profession. Some partnerships may need to fill in more than one set of Partnership Trading pages.
Need to know! In addition to the main SA800 tax return, each partner must also file a personal tax return (SA100) and the SA104 supplementary pages to declare their share of any profit or loss. Submitting the SA100 and the SA104 determines how much tax, if any, individual partners must pay. Often this gets missed and results in partners being fined by HMRC. A separate page must be completed for each partnership someone belongs to.
How to register a business partnership
You must register your partnership for Self Assessment with HMRC if you’re the ‘nominated partner’ (the partner responsible for tax and filing the partnership tax return).
Partnerships must be registered before 5 October in your business partnership’s second tax year, otherwise there could be a penalty to pay. The other partners must register themselves separately as a partner. You won’t be able to file an SA800 Partnership Tax Return or a tax return for yourself unless you’re registered.
- Visit government website GOV.uk to register your new partnership.
- If you can’t register online, you can also register using form SA400 (form SA401 to register as a partner), which can be posted to HMRC.
SA800 Partnership Tax Return supplementary pages
Some types of income are taxed differently when earned through a partnership, for example, rental income or income earned from outside of the UK. You must tell HMRC about these in the SA800 and then provide details in supplementary pages. Such sources of income and the supplementary pages used to report them include:
- Self Assessment: Partnership Statement (full) (SA800(PS))
You use supplementary pages SA800(PS) to declare earnings from sources that aren’t trading/professional income.
- Self Assessment: Partnership Trading and Professional Income (SA800)(TP)
You use supplementary pages SA800(TP) to record income from more than one trade or profession on your SA800 Partnership Tax Return.
- Self Assessment: Partnership UK property (SA801)
You use supplementary pages SA801 to record UK property income on your SA800 Partnership Tax Return.
- Self Assessment: Partnership Foreign (SA802)
You use supplementary pages SA802 to complete your SA800 Partnership Tax Return if your partnership generated income from outside of the UK.
- Self Assessment: Partnership disposal of chargeable assets (SA803)
You use supplementary pages SA803 to complete your SA800 Partnership Tax Return if your partnership “disposed of any chargeable assets” (eg stocks, shares, land and buildings, business assets such as goodwill, etc).
- Self Assessment: Partnership savings and investments and other income (SA804)
You use supplementary pages SA804 to record savings, investments and other income on your SA800 Partnership Tax Return.
Responsibility for filling out and filing an SA800
By law, the partner nominated by the other partnership members must complete the SA800 Partnership Tax Return and either send it by post to HMRC or file it online using commercial filing software.
The nominated partner is usually chosen when the partnership is set up, but HMRC can choose someone if no one has been selected. If an SA800 Partnership Tax Return has been issued by HMRC in the name of a specific partner, they’re required by law to complete and file it.
Need to know! When reporting profit or loss, the split must accord with the terms of the partnership agreement. In most cases the share is the same for each partner, although it’s not always the case.
How to file your SA800 Partnership Tax Return
- You can send your completed SA800 Partnership Tax Return and any supplementary pages by post to HMRC.
- Alternatively, most people file their completed SA800 Partnership Tax Return and any supplementary pages online, but you need to buy commercial software to do this. Government website GOV.uk lists commercial tax return software suppliers.
SA800 Partnership Tax Return filing deadlines
- If you file a paper SA800 Partnership Tax Return, you have until midnight 31 October following the end of tax year (5 April) to which the information refers.
- If you file your SA800 Partnership Tax Return online, you have until midnight on 31 January following the end of tax year (5 April) to which the information refers.
SA800 Partnership Tax Return late-filing penalties
If you don’t file your SA800 Partnership Tax Return before the paper or online deadline, whichever one you choose, each member of the partnership during the tax return period must pay a £100 penalty, unless you have a valid reason for being late.
If the partners still fail to file their SA800, each partner will be charged:
- More than three months late – a penalty of £10 per additional day the SA800 Partnership Tax Return is late up to a maximum of 90 days (£900).
- More than six months late – a fixed penalty of £300.
- More than 12 months late – a further fixed penalty of £300.
Need to know! You must complete the Partnership Tax Return in full. If you have a disability that makes filling in the return difficult HMRC can help you complete the form.
What happens after HMRC receives your SA800?
After receiving it, HMRC will process your Partnership Tax Return using the figures you have entered. If there are any obvious mistakes, HMRC will correct them and let you know. HMRC may also contact you if it has any queries over the figures you’ve entered.
HMRC has 12 months from the date of filing to check your SA800 Partnership Tax Return and any supplementary pages. It can ask you to provide accounting figures from which you took the figures you entered in the tax return. These can also be checked against your bank account figures.
All partnership members are responsible for the accuracy of their SA800 Partnership Tax Return. The partnership should retain records of all its business transactions. You must keep these for at least six years and show them to HMRC on request.
SA800: tax payment deadlines
The deadlines for paying your tax bill are:
- 31 January for tax you owe for the previous tax year (called a “balancing payment”) and your first payment on account (ie advance payments towards your tax bill) then
- 31 July for your second payment on account.