GSL / Foreign Companies Audit / Audit Scotland

Scottish company audit, financial statements, accounting, consulting in Scotland

Scotland is a jurisdiction which is an autonomous administrative and political part of the United Kingdom of Great Britain and Northern Ireland and occupies the northern part of the island of Great Britain. Unlike offshore islands, Scotland is not a classic offshore zone. The main sectors of the economy: services, manufacturing, construction and agriculture. Income tax is not paid in Scottish partnerships (partners include the current income of the partnership in the share due to them in their taxable income). There is a tax on savings – like dividends, it is taxed at 20%. There is no requirement to file a financial statement with the Registrar’s Office for all partnerships, but there is an obligation to file tax returns.

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Service packages Legislation Tax System Audit Services
Preparation and submission of the company's tax returns
from 200 USD
Preparation and submission of the company's financial statements

(according to the actual time spent)

100 – 400 USD per hour
Registration of the participant of the partnership with the tax inspectorate
from 200 USD
Preparation and filing of individual declarations of partnership participants
from 200 USD
Liquidation of a company
1 210 USD
Consulting services and support during tax audits
200-300 USD per hour

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General requirements

In terms of taxation, a Limited Partnership (LP) has tax transparency: it is not considered a separate taxpayer since all taxes on the generated profit must be paid by the partners in proportion to their interest in the joint capital.

If a partnership has no income from sources in the United Kingdom and it does not conduct business in the territory of the United Kingdom, then the partners’ obligation to pay tax is only determined by the place of their tax residency.

However, the partnership must still keep a record of source documents, income and expenses and form profit figures.

Tax accounts

A partnership must file a tax return. A tax return shall reflect income and expenses for the reporting period that ended in the relevant tax year (which lasts from 6 to 5 April). A tax return must contain names, addresses, and, normally, the Unique Tax Reference (UTR) of each partner, information on income and expenses, profits and losses from sale of the partnership’s assets and partners’ interest therein.

A tax return:

  • must be filed in electronic form or filled out according to the form of the tax and customs authority;
  • must be filled out and signed by the designated partner;
  • must include all additional pages that support the necessity of having the tax return.

A tax return shall reflect profits and losses of each partner. If the case of late filing of a tax return or inaccuracies, all partners bear joint liability.

For the purpose of accurate completion of a tax return, all partners must ensure storage of all necessary records, including a record of all sales and purchases of the partnership.

Period and time frame for submission of tax accounts

The period covered by a tax return varies depending on whether the partnership consists of legal entities or individuals. For example, if the partners are individuals, then the tax return must contain information on all financial periods ending in a certain tax year.

The deadline for filing also depends on what kind of partners the partnership has: individuals or legal entities. If a partnership consists of individuals, the deadline for filing a tax return coincides with that for individuals: 31 October for a tax return on paper and 31 January for an electronic tax return. If a partnership consists of legal entities, the deadline is set depending on the period stated in the tax return. Normally, it is not earlies than 9 months after the end of the period stated in the tax return if the tax return is filed on paper, and 12 months if it is filed in electronic form. If the partnership is mixed, the deadline is quite flexible and depends on the date of reporting.

Preparation of financial statements

Normally, a Scottish LP is not required to file accounts with the Companies House save as otherwise provided by the Partnerships (Accounts) Regulations 2008 and the Companies and Partnerships (Accounts and Audit) Regulations 2013. If these regulations apply, general partners that are limited liability companies incorporated in the United Kingdom must enclose a copy of accounts of the partnership with a copy of accounts of the limited liability company.

Accounts can cover a period of up to 18 months, which can be stated in the partnership agreement. If the period is not stated in the agreement, partners must prepare accounts for a 12-month period that ends on 31 March.

Requirements regarding filing of financial statements

A partnership’s accounts must be filed within 9 months after the end of the financial year.

The following information must be provided upon request: name of each member that is required to file a copy of the partnership’s accounts; name of each member incorporated in another state of the European Economic Area (EEA) that is required to publish the partnership’s accounts in that state.

If no partner of a partnership is a limited liability company, accounts must be available for any person’s inspection for free during business hours in the principal place of business of the partnership (along with a certified translation if the original is not made in English).

If the principal place of business is outside the United Kingdom, accounts must be available:

  • in the principal place of business or the head office of any partner whose head office or principal place of business is in the United Kingdom;
  • at an address in the United Kingdom designated by partners if no partner has its head office or principal place of business in the United Kingdom.

Each partner must also provide any person, upon request, with a copy of the latest accounts of the partnership (along with a translation if the original accounts are not in English).

Liability for accounts filing violations

Each partner or director of a company that is a partner can be punished for violation of the accounts filing requirements (including they can be imposed with a penalty of an unlimited amount).

Exemption from financial statements publication regulations

According to article 7 of the Partnerships (Accounts) Regulations 2008, partners are not required to publish accounts if accounts of the partnership are part of consolidated accounts prepared by:

  • a partner of the relevant partnership formed according to legislation of a member state of the EEA;
  • the parent company of such partner/shareholder.

In such a case consolidated accounts must be prepared and audited by an auditor in accordance with legislation of the member state of the EEA, according to the Seventh Company Law Directive or international accounting standards. And use of preferential treatment must be referred to in the accounts.

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