United Kingdom-LLP

Basic taxes (briefly)

Personal tax 20-45%
Corporate tax (in detail) Main rate - 19%
Capital gains tax. Details 20%
VAT. Details 20%
Other taxes Real property tax; Inheritance tax; National Insurance Conrtributions
Government fee
Stamp duty 0.5%

International tax agreement

   


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TAXATION

LLP Taxation

You must register your partnership and its members with HM Revenue and Customs (HMRC).
Partners who are individuals pay Income Tax and National Insurance through Self Assessment.
If a partner is a company, it must be registered with HMRC for Corporation Tax.
You can appoint an agent to deal with HMRC on your behalf.
You must register the partnership or individual partners by 5 October in your business’ second tax year, or you could be charged a penalty.
For example, if you start a partnership or become a partner during the 2013 to 2014 tax year, you must register before 5 October 2014.
Register for Self Assessment
Each partner must be registered with HMRC for Self Assessment.
Your partnership must also be registered for Self Assessment. For this a ‘nominated’ partner should download and fill in form SA400. When the nominated partner registers the partnership they will automatically register themselves for Self Assessment.
Register for VAT
Your partnership must register for VAT with HMRC if their VAT taxable turnover is more than £81,000.
You can choose to register if it’s below this, e.g. to reclaim VAT on business supplies.
Any partner can register, either:
  • online
  • by downloading and filling in VAT 1 and VAT 2

If you use the paper forms you still need to submit your VAT Return online. When you get your VAT number from HMRC, sign up for a VAT online account.
Once you’re registered for VAT you need to let HMRC know every time someone leaves or joins your partnership.

Individual Taxation

Personal Income Tax
Individuals who are resident and domiciled in the UK are subject to tax on their worldwide income and gains. Different treatment may apply where a person, although resident, is not domiciled in the UK.
A new “statutory residence test” (SRT) applies as from 6 April 2013. The SRT is based on a combination of physical presence and connection factors with the UK and other jurisdictions. Domicile is a distinct concept from residence. An individual's domicile status may be determined by the domicile of his/her parents or can be acquired by choice. UK resident, but nondomiciled taxpayers can enjoy favorable tax treatment in respect of income and assets outside the UK.
Residents who are not domiciled in the UK may make a claim for the remittance basis of taxation to apply to overseas income, in exchange for an additional tax liability of GBP 30,000 per annum for taxpayers who have been UK resident for seven out of the past nine years, and rising to GBP 50,000 once resident for 12 out of the last 14 tax years. The remittance basis also may apply without the requirement to make a claim, if (broadly) the unremitted overseas income (and overseas capital gains) is less than GBP 2,000.
Taxable income includes:
  • earnings from employment
  • earnings from self-employment
  • most pensions income (State, company and personal pensions)
  • interest on most savings
  • income from shares (dividends)
  • rental income
  • income paid to you from a trust

Income tax is charged at progressive rates. Income Tax rates 2014 to 15 by tax band and type of income are as follows:
Income, GBP Rate on all income except dividends Rate on dividends
0-2,880 (starting rate for savings) 10% N/A
0-31,865 (basic rate) 20% 10%
31,866-150,000 (higher rate) 40% 32.5%
Over 150,000 (additional rate) 45% 37.5%

Dividends from UK companies and many non-UK companies attract a nonpayable tax credit. (The credit is not available where the individual’s holding in a non-UK company is 10% or more and the company is located in a territory that has not concluded an appropriate tax treaty with the UK.)
Capital Gains Tax
Individuals who are domiciled and resident in the UK are subject to capital gains tax on all chargeable assets, regardless of where they are situated. Similar to the rules for overseas income, an individual who is not domiciled in the UK may make a claim for the remittance basis of taxation to apply to any capital gains on non-UK assets. An annual exemption is available to reduce capital gains (GBP 10,900 for 2013/14), except in tax years where a claim for the remittance basis is made. Where individuals who leave the UK to become nonresident realize gains in a tax year after their departure, such gains are not chargeable to UK capital gains tax, unless the individuals are absent from the UK for less than five tax years and they acquired the asset before they left.
The rate of capital gains tax is determined by the total of capital gains and income. Capital gains tax is payable at a rate of 28% where an individual is liable to pay income tax at the higher rate or the dividend upper rate. For 2013/14, if taxable income is less than GBP 32,011, the rate of capital gains tax is 18%, except to the extent the gains, when added to income, would be in excess of the GBP 32,010 limit. In that case, the excess is taxed at 28%.
Entrepreneurs’ relief reduces the rate of capital gains tax to 10% for certain business assets, subject to a lifetime limit of GBP 10 million of gains per individual. No tax is payable on gains up to the annual exempt amount (GBP 10,900 for 2013/14).
Administration and compliance
The tax year is 6 April to 5 April of the following year.
Tax on employment income is withheld by the employer under the Pay As You Earn (PAYE) system and remitted to the tax authorities. Tax on income not subject to PAYE and capital gains tax are self-assessed. If an individual is required to file a tax return, it must be filed by 31 October (or 31 January, if filing online) after the tax year. Payment of tax is due by 31 January after the tax year.
Individuals are liable to a penalty of GBP 100 for failure to file a tax return by the due date. The penalties escalate if the return is filed more than three months after the due date. Tax-geared penalties also can be sought for matters such as late payment of tax and tax returns that are carelessly or deliberately incorrect. Interest is paid on tax paid late.

Corporate Income Tax

Corporation Tax is a tax on the taxable profits of limited companies and other organisations including clubs, societies, associations and other unincorporated bodies.
A UK resident company is subject to corporation tax on worldwide profits and gains, with credit given for overseas taxes. Foreign profits (and losses) (including those from certain capital assets) arising from the permanent establishment of a UK resident company may be excluded by making an irrevocable election. The effect of the election may be deferred where there have been losses in any of the PEs. There are anti-diversion rules in based on the new CFC rules that may restrict the profits that can be excluded from the charge to UK tax by virtue of the election.
A nonresident company is subject to tax only in respect of UK-source profits, which include the income of a UK PE, income from UK real estate, certain UK-source interest income and gains on assets used for purposes of a PE’s trade.
The following limited companies and unincorporated organisations are subject to Corporation Tax requirements:
  • limited companies incorporated in the UK
  • foreign-based companies with a permanent place of business in the UK
  • members' clubs, such as social clubs, sports clubs and holiday clubs
  • societies, such as friendly societies and provident societies
  • associations, such as housing associations and trade associations
  • co-operatives
  • other unincorporated associations
  • groups of individuals carrying on a business that is not a partnership
  • charities, or companies that are subsidiaries of - or wholly owned by - a charity
  • NHS foundation trusts if they are carrying out significant commercial activities that are not part of core health care delivery, such as running a commercial laundry

Taxable profits for Corporation Tax include:
  • profits from taxable income such as trading profits and investment profits (except dividend income which is taxed differently)
  • capital gains - known as 'chargeable gains' for Corporation Tax purposes

Certain activities carried out by organisations that are otherwise subject to Corporation Tax requirements are exempt from corporation tax:
  • trading profits generated by charities where those profits arise from, and are applied to, charitable purposes
  • profits from any fundraising events run by charities or voluntary organisations provided that those profits are applied to charitable purposes

HMRC defines charitable purposes as carrying out the primary purpose of the charity and/or directly serving the beneficiaries of the charity.
Other activities exempt from Corporation Tax include:
  • agricultural exhibitions or shows if the agricultural society that's running them uses any profits solely for the purposes of the society
  • the sale of permanent health insurance or sickness insurance by a friendly society
  • non-commercial activities connected with core health care delivery undertaken by NHS foundation trusts

Corporation Tax rates
The main rate of Corporation Tax - set at 19%.

Capital Gains Tax

Capital gains form part of a company’s taxable profits. Gains (or losses) on the disposal of substantial shareholdings in both UK and foreign companies can be exempt. The main conditions, broadly, require the selling company to have continuously owned at least 10% of the shares of the company being sold for at least 12 of the 24 months before disposal and the selling company/company being sold must be trading or members of a trading group (without, to a substantial extent, any non-trading activities) for at least 12 months before disposal (in some cases this may have to be 24 months) and immediately after the disposal. When an election has been made to exclude the profits of PEs, the exclusion also may apply to gains and losses of certain capital assets of the PE, unless the company is a close company. A nonresident company generally is not subject to tax on its capital gains unless the asset is held through a UK PE.
A capital gains tax charge was introduced from April 2013 for nonresident companies and certain other vehicles disposing of UK residential property valued at more than GBP 2 million. Exemptions from this charge are available in various circumstances (broadly, where the property is not being used as a residence of shareholder owning 5% or more of the company).

Dividends

A dividend exemption applies to most dividends (and distributions) unless received by a bank, insurance company or other financial trader. Dividends received by a non-small UK company on most ordinary shares and many dividends on nonordinary shares from another company (UK or foreign) are exempt from UK corporation tax, with no minimum ownership period level. The exemption also can apply to small companies receiving dividends (and distributions) from UK companies or foreign companies resident in a jurisdiction that has concluded a tax treaty with the UK that includes a nondiscrimination provision.

Losses

Trading losses generally can offset total profits of the year (including capital gains), with carryback of the excess to the preceding year permitted. Trading losses may be carried forward indefinitely (unless there is a change of ownership of the company and a major change in the nature and conduct of the trade within three years), but can be offset only against trading income. Capital losses may be offset only against capital gains and may only be carried forward.

Tax Year

For Corporation Tax, the tax year is called the 'financial year' or 'fiscal year' and runs from 1 April to 31 March. This is different from the tax year for individual taxpayers, which runs from 6 April to 5 April.
Your company or organisation pays Corporation Tax on taxable profits for each Corporation Tax accounting period, which is normally 12 months long and normally matches your company's financial year. However, certain events or changes of circumstances can cause accounting periods to change. You cannot choose your Corporation Tax accounting period.

Corporation Tax Self Assessment

Corporation Tax Self Assessment means that it's up to you (rather than HMRC) to work out how much Corporation Tax your company or organisation must pay for each Corporation Tax accounting period. You do this by filing your Company Tax Return to HMRC.

Corporation Tax Filing and Payment

Unlike other taxes such as Income Tax or VAT - where in most cases the filing and payment deadlines are identical - this is not the case with Corporation Tax. The deadline to pay your Corporation Tax is before the deadline to file your Company Tax Return. Generally you must:
  • pay by 9 months and one day after the end of your company or organisation's Corporation Tax accounting period
  • file by 12 months after the end of your company or organisation's Corporation Tax accounting period

For example, if your company or organisation's financial year runs from 1 April 2011 to 31 March 2012, and your Corporation Tax accounting period is the same, you must:
  • pay your Corporation Tax for that period by 1 January 2013
  • file your Company Tax Return for that period by 31 March 2013

If your company's profits for an accounting period are at an annual rate of more than £1.5 million, you must normally pay your Corporation Tax for that period in instalments, all of which are due before the deadline to file your Company Tax Return.
You can deal directly with HMRC or you can appoint someone to deal with HMRC on your behalf for your Corporation Tax affairs. This is known as appointing an agent.

Withholding Tax

Dividends: there typically is no withholding tax on dividends paid by UK companies under domestic law, although a 20% withholding tax generally applies to distributions paid by a REIT form its tax-exempt rental profits (subject to relief under a tax treaty).
Interest: interest paid to a nonresident is subject to a 20% withholding tax, unless the rate is reduced under a tax treaty or the interest is exempt under the EU interest and royalties directive. Reduction under a tax treaty is not automatic and advance clearance must be granted by the UK tax authorities.
Royalties: royalties paid to a nonresident are subject to a 20% withholding tax, unless the rate is reduced under a tax treaty or the royalties are exempt under the EU interest and royalties directive. Advance clearance is not required to apply a reduced treaty rate.
Technical service fees: no
Branch remittance tax: no

VAT

VAT is a tax that's charged on most goods and services that VAT-registered businesses provide in the UK. It's also charged on goods and some services that are imported from countries outside the European Union (EU), and brought into the UK from other EU countries.
VAT is charged when a VAT-registered business sells to either another business or to a non-business customer.
When VAT-registered businesses buy goods or services they can generally reclaim the VAT they've paid.
There are three rates of VAT, depending on the goods or services the business provides. The rates are:
  • standard - 20 per cent
  • reduced - 5 per cent
  • zero - 0 per cent

There are also some goods and services that are exempt from VAT or outside the UK VAT system altogether.
Examples of reduced-rated items
These are some examples of goods and services that may be reduced-rated, depending on the product itself and the circumstances of the sale:
  • domestic fuel and power
  • installing energy-saving materials
  • sanitary hygiene products
  • children's car seats

This isn't a complete list of reduced-rated items and services.
Examples of zero-rated items
These are examples of goods and services that may be zero-rated, depending on the product itself and the circumstances of the sale:
  • food - but not meals in restaurants or hot takeaways
  • books and newspapers
  • children's clothes and shoes
  • public transport

This isn't a full list of zero-rated items.
Exempt items
Some items are exempt from VAT because the law says they mustn't have any VAT charged on them. Items that are exempt include the following:
  • insurance
  • providing credit
  • education and training, if certain conditions are met
  • fundraising events by charities, if certain conditions are met
  • membership subscriptions, if certain conditions are met
  • most services provided by doctors and dentists

Selling, leasing and letting commercial land and buildings are also exempt from VAT. But you can choose - or 'opt' - to give up the right to the exemption and to charge VAT at the standard rate instead. This allows you to reclaim input tax when otherwise you wouldn't be able to.
Outside the scope of VAT
There are some things that aren't in the UK VAT system at all - they're outside the scope of VAT. They are not taxable supplies and no VAT is charged on them. Items that are outside the scope of VAT include:
  • non-business activities like a hobby - for example, you might sell some stamps from your collection
  • fees that are fixed by law - known as 'statutory fees' - for example the congestion charge or vehicle MoT tests

VAT Registration

Registration is compulsory for businesses whose taxable supplies exceed £81,000 (for 2014/15) in any given year or where a business expects that its taxable supplies will exceed this threshold within the next 30 days.
Voluntary registration is possible for businesses making taxable supplies below this threshold. Deregistration is possible if taxable supplies fall below £79,000. If a business does not have a place of business in the UK, the registration threshold does not apply. The registration date will be the earlier of the date the business makes taxable supplies in the UK or the date the business expects it will make taxable supplies in the next 30 days.

VAT Tax Period and Returns

VAT return are usually due on a quarterly basis (taxable persons are allocated one of three VAT return periods). A taxable person also may be allowed to complete returns on a monthly basis.
If the VAT return is not filed by the due date or the VAT due is not paid, a taxable person may be liable to a surcharge.

Stamp Duty

Stamp duty is levied on the transfer of UK shares at 0.5% rate, payable by the transferee.
Stamp Duty Land Tax is charged on transfers of UK real property. For residential property, the rates are between 0% and 7%, depending on the value of property. The rates for nonresidential property are 0% to 4%. A 15% rate applies to purchases of residential property valued at more than GBP 2 million by companies and certain other vehicles.
In certain cases, transfers within a tax group may be free from stamp duty.

Government Fee

There is no government fee in UK. The only annual fee which should be paid by LLPs is a fee for filing an annual return.

Other Taxes and Duties

Real property tax The national nondomestic rate is payable by individual occupiers of business premises. Local authorities collect the tax by charging a uniform business rate, which is deductible in computing taxable income.
Inheritance/estate tax Inheritance tax is charged on property passing on death, certain gifts made within seven years of death and some lifetime transfers (e.g. to a discretionary trust). Where due, inheritance tax is payable on assets in excess of GBP 325,000 (2013/14 and 2014/15) at a rate of 40% (20% for certain lifetime transfers). Transfers between spouses, in lifetime or upon death, generally are exempt from inheritance tax unless only the donor spouse has a UK domicile. For nondomiciled individuals, only UK property is subject to inheritance tax, although long-term residence can result in deemed UK domicile (for inheritance tax purposes only) once an individual has been UK-resident in 17 out of the last 20 tax years.
Social security contribution National Insurance Contributions (NIC) are payable by employers, employees and self-employed individuals. For example, for 2013/14, weekly paid employees pay NIC at a rate of 12% on weekly income between GBP 149 and GBP 797 and 2% on income exceeding this amount. For employers, NIC is payable at a rate of 13.8% on all income in excess of GBP 148 per week (for 2013/14).

Anti-Avoidance Rules

Transfer pricing: Comprehensive transfer pricing provisions apply to transactions with both domestic and foreign companies. The UK transfer pricing rules follow OECD principles. This includes a requirement to prepare documentation to demonstrate compliance with the arm’s length standard. Advance pricing agreements are possible in certain situations.
Thin capitalization: The arm’s length principle applies. There are no safe harbor provisions. Advance thin capitalization agreements are available.
Controlled foreign companies: CFC provisions are applicable where, broadly, a UK company has a interest (direct or indirect) of at least 25% in a nonresident company that is controlled by UK residents. New rules apply for accounting periods beginning on or after 1 January 2013, which are more specifically targeted at situations where profits have been artificially diverted from the UK. The regime operates on an income stream basis and there is a “gateway” test and a number of provisions that may apply to exempt a company from the rules. Where the CFC rules do apply, the relevant profits of the CFC are computed as though it were UK resident and its UK shareholder is subject to tax accordingly. In addition, an overseas finance company can be fully or partially exempt from a CFC charge on profits derived from certain overseas group financing arrangements. The partial exemption works by taxing 25% of the finance company profits at the main corporate tax rate (which will result in an effective rate of 5.75%, based on the main rate of 23% that is effective until 1 April 2014).
Other rules: There are many specific anti-avoidance rules. A general anti-abuse rule (GAAR) applies for arrangements entered into on or after 7 July 2014. The GAAR applies across a wide range of taxes, including corporation tax, income tax, capital gains tax and stamp duty. The legislation gives the UK tax authorities power to potentially apply the GAAR to counteract tax advantages arising from tax arrangements that are abusive.
Disclosure requirements: Certain tax arrangements that result in a UK tax advantage and fall within prescribed hall marks must be disclosed to the UK tax authorities by, for example, a promoter, and the user must note the use of such arrangements on the tax return. Separately, certain transactions valued at more than GBP 100 million, involving, for example, the issue of shares or debentures by, or the transfer or permitting the transfer of shares or debentures of, a foreign subsidiary of a UK company, also have to be reported to the UK tax authorities within 6 months of the transaction. There is a list of excluded transactions that do not need to be reported.

Double Tax Agreements

The UK has exchange of information relationships with 146 jurisdictions through:
  • 129 DTC: Albania, Algeria, Argentina, Armenia, Australia, Austria, Azerbaijan, Bahrain, Bangladesh, Barbados, Belarus, Belgium, Belize, Bolivia, Bosnia and Herzegovina, Botswana, Brunei Darussalam, Bulgaria, Canada, Cayman Islands, Chile, China, Colombia, Croatia, Cyprus, Czech Republic, Côte d'Ivoire, Denmark, Egypt, Estonia, Ethiopia, Falkland Islands (Malvinas), Faroe Islands, Fiji, Finland, Former Yugoslav Republic of Macedonia, France, Gambia, Georgia, Germany, Ghana, Greece, Grenada, Guernsey, Guyana, Hong Kong, Hungary, Iceland, India, Indonesia, Ireland, Isle of Man, Israel, Italy, Jamaica, Japan, Jersey, Jordan, Kazakhstan, Kenya, Kiribati, Korea (Republic of), Kosovo, Kuwait, Latvia, Lesotho, Libya, Liechtenstein, Lithuania, Luxembourg, Malawi, Malaysia, Malta, Mauritius, Mexico, Moldova (Republic of), Mongolia, Montenegro, Montserrat, Morocco, Myanmar, Namibia, Netherlands, New Zealand, Nigeria, Norway, Oman, Pakistan, Panama, Papua New Guinea, Philippines, Poland, Portugal, Qatar, Romania, Russian Federation, Saudi Arabia, Senegal, Serbia, Sierra Leone, Singapore, Slovakia, Slovenia, Solomon Islands, South Africa, Spain, Sri Lanka, Sudan, Swaziland, Sweden, Switzerland, Tajikistan, Thailand, Trinidad and Tobago, Tunisia, Turkey, Turkmenistan, Tuvalu, Uganda, Ukraine, United Arab Emirates, United States, Uruguay, Uzbekistan, Venezuela, Viet nam, Zambia, Zimbabwe.
  • 26 TIEA: Anguilla, Antigua and Barbuda, Aruba, Bahamas, Belize, Bermuda, Brazil, Curaçao, Dominica, Gibraltar, Grenada, Guernsey, Isle of Man, Jersey, Liberia, Liechtenstein, Macao (China), Marshall Islands, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, San Marino, Sint Maarten, Turks and Caicos Islands, Uruguay, Virgin Islands, British

Foreign exchange control

There are no foreign exchange controls in the UK.

ACCOUNTS

Accounting Records

Do all LLPs have to keep accounting records?
Yes, all LLPs have to keep accounting records which enable the members to prepare accounts that comply with the requirements of the legislation.
What must accounting records include?
Accounting records must in particular contain:
  • entries showing all money received and expended by the LLP
  • a record of the assets and liabilities

Also, where the LLP’s business involves dealing in goods, the records must contain:
  • statements of stock held by the LLP at the end of each financial year
  • all statements of stock takings from which you have taken or prepared any statements of stock
  • statement of all goods sold and purchased, other than by ordinary retail trade. This should list the goods, the buyers and sellers

A parent LLP must take reasonable steps to ensure that any subsidiary undertaking keeps sufficient accounting records so that the members of the parent LLP are able to prepare accounts that comply with the requirements of the Companies Act, including where the accounts are prepared using International Accounting Standards (IAS).
Where must an LLP keep its accounting records?
An LLP must keep its accounting records at its registered office address or a place that the members think suitable. The records must be open to inspection by the LLP members at all times.
If the LLP holds the records at a place outside of the UK, it must send accounts and returns with details of the business dealt with in the accounting records at least every six months and keep them in the UK. Those accounts and returns must disclose the financial position and enable the members to prepare accounts that comply with the requirements of the Companies Act, including where accounts are prepared using International Accounting Standards (IAS).
How long must an LLP keep its records?
An LLP must keep its accounting records for 3 years from the date they were made.

Accounts

The Partnerships (Accounts) Regulations 2008 require the members of a ‘qualifying partnership’ to prepare accounts, which those members that are limited companies must attach to their own accounts for filing with Companies House.
What is a qualifying partnership?
A qualifying partnership is a partnership formed under the law of any part of the United Kingdom if each of the members is:
  • a limited company
  • an unlimited company each of whose members is a limited company
  • a Scottish limited partnership, each of whose general partners is a limited company
  • any other Scottish partnership, each of whose members is a limited company

Preparation of Accounts

What accounts must the partnership prepare?
The members of the qualifying partnership must prepare audited accounts as if the qualifying partnership was a limited company. The accounts must conform to the requirements of the Companies Act 2006 and related regulations.
Under regulation 7 of The Partnerships (Accounts) Regulations 2008, the members of a qualifying partnership do not have to prepare partnership accounts if the partnership is dealt with on a consolidated basis in group accounts prepared by either:
  • a member of the qualifying partnership which is established under the law of a member state of the European Economic Area (EEA)
  • a parent undertaking of such a member

In these cases, the group accounts must be prepared and audited under the law of the EEA State in accordance with the Seventh Company Law Directive or International Accounting Standards. A note to the group accounts must disclose that advantage has been taken of this exemption.
What does a set of accounts include?
Generally, accounts must include:
  • a profit and loss account
  • a balance sheet signed by a designated member on behalf of the board
  • and the printed name of that member;
  • notes to the accounts
  • group accounts (if appropriate)

And accounts must be accompanied by an auditor's report stating the name of the auditor and signed and dated by him (unless the LLP is exempt from audit).
What period must the accounts cover?
The accounts may cover any period up to 18 months which may be specified in the partnership agreement. If the partnership agreement does not specify a period, the members, must draw up the accounts for each 12 month period ending on 31 March in each year.
When must I prepare the accounts?
You must prepare the partnership accounts within a period of 9 months after the end of the financial year.
What is a financial year?
A financial year is usually a 12 month period for which you prepare accounts. Every LLP must prepare accounts that report on the performance and activities of the LLP during the financial year. This starts on the day after the previous financial year ended or, in the case of a new LLP, on the day of incorporation.
Financial years are determined by reference to an accounting reference period. The accounting reference period ends on the accounting reference date. LLPs have the choice to make up their accounts up to the accounting reference date or a date up to seven days either side of it without filing an LL AA01 form, if this is more convenient.
How is the accounting reference date determined?
For all new LLPs, the legislation sets the first accounting reference date as the last day in the month in which the LLP's first anniversary falls. The subsequent accounting reference dates will automatically be on the same date each year. For example, an LLP incorporated on 1 October 2013 will have its first accounting reference date as 31 October 2014 and 31 October for every year thereafter.
Can I change the accounting reference date?
Yes, you can change the current or the immediately previous accounting reference date by extending or shortening the period. To do this you must notify Companies House of a change of accounting reference date on LL AA01. You must submit an acceptable change of accounting reference date form before the filing deadline of the accounts for the period that you wish to change. In other words, if accounts for a particular accounting reference period become overdue, it is too late to change the accounting reference date.
LLPs normally have 9 months to submit their accounts to Companies House after the end of each accounting reference period.
Who can approve and sign accounts?
The LLP members must approve the accounts and have them signed on their behalf by a designated member who must also print their name. The printed name and signature must be on the balance sheet, and any statement about the accounts being prepared under the small LLPs regime must appear above these.
When must I deliver and publish the accounts?
If you are a limited company which is a member of a qualifying partnership, you must attach the partnership accounts to the next accounts which you deliver to Companies House. You must also supply to any person upon request:
  • the name of each member required to deliver copies of the partnership accounts to Companies House
  • the name of each member incorporated in another EEA State who is required to publish the partnership accounts in that state

When none of the members of a qualifying partnership is a limited company, or an undertaking comparable to a limited company incorporated in another EEA State, then the partnership must make their accounts available for inspection by any person, without charge, during business hours at the principle place of business of the partnership (together with a certified translation, if the original is not in English). Where the principle place of business has moved outside the UK, the partnership must make the accounts available for inspection in the same way at:
  • the principle place of business or head office of any "member" of the partnership that has a head office or principle place of business in the UK
  • where no "member" of the partnership has a head office or principle place of business in the UK, at an address in the UK nominated by the "members" of the qualifying partnership.

Each member of the partnership must also, supply to any person on request a copy of the latest accounts of the partnership (together with a translation if the original is not in English). A fee may be charged to cover the administrative cost of supplying the copy, but no more.

Filing Accounts

Are the accounts filed with Companies House different to the accounts prepared for the members?
The designated members (who are responsible for filing accounts at Companies House) can simply submit a copy of the accounts that have already been prepared for the members.
Do all LLPs have to file their accounts at Companies House?
All LLPs must deliver accounts to Companies House.
Do I still need to file my accounts with HMRC and other regulatory bodies?
Yes. The accounts submitted to Companies House are in accordance with the Companies Act 2006 as applied to LLPs. You must still file with other regulatory bodies according to their requirements and filing deadlines.
How long do the designated members have to file the LLP's first accounts?
If you are filing your company's first accounts and those accounts cover a period of more than 12 months, you must deliver them to Companies House:
  • within 21 months of the date of incorporation
  • 3 months from the accounting reference date, whichever is longer
The deadline for delivery to Companies House is calculated to the exact day.
For example, an LLP incorporated on 1 January 2014 with an accounting reference date of 31 January has until midnight on 1 October 2015 (21 months from the date of incorporation) to deliver its accounts, not 31 October.
How long do I normally have to file my accounts?
Unless you are filing your company's first accounts the time normally allowed for delivering accounts to Companies House is:
  • 9 months from the accounting reference date

Can I apply for extra time to file?
Yes. If there is a special reason for doing so, you may apply to extend the time for delivering accounts to Companies House; for example, if there has been an unforeseen event which was outside the control of the LLP and its auditors.
You must make the application and deliver it before the normal filing deadline. It must contain a full explanation of the reasons for the extension and the length of the extension requested.
What if I deliver the accounts late?
Failure to deliver accounts on time is a criminal offence. In addition, the law imposes a civil penalty for late filing of accounts on the company. The amount of the penalty depends on how late the accounts arrive:
Length of delay Penalty
Not more than 1 month £150
More than 1 month but not more than 3 months £375
More than 3 months but not more than 6 months £750
More than 6 months £1500

What if the filing deadline falls on a Sunday or a Bank Holiday?
If a filing deadline falls on a Sunday or Bank Holiday, the law still requires you to file the accounts by that date. To avoid a penalty, please ensure that you send acceptable accounts in time to arrive before the deadline.
It is the date that you deliver acceptable accounts which meet the relevant legal requirements to Companies House that is important, not the date that you sent the accounts.
What if I do not submit accounts to Companies House at all?
If the Registrar believes that an LLP is no longer carrying on business or in operation, he could strike it off the register and dissolve it. In this event, all the assets of the LLP, including its bank account and property, generally become the property of the Crown.
Failure to deliver documents is a criminal offence. The designated members of the LLP risk prosecution. On conviction, a designated member could end up with a criminal record and a fine of up to £5,000 for each offence. This is separate from the civil penalty imposed on the LLP for late filing of accounts.
Can I submit accounts online?
No, LLPs cannot currently submit accounts using either the WebFiling or Software Filing services.

Abbreviated Accounts for Small LLP

A small LLP must meet at least two of the following conditions:
  • annual turnover must be not more than £6.5 million
  • the balance sheet total must be not more than £3.26 million
  • the average number of employees must be not more than 50

An LLP cannot prepare and submit small LLP accounts if it is, or was at any time during the financial year, one of the following:
  • an LLP whose securities are admitted to trading on a regulated market in an EEA State
  • an LLP that: is an authorised insurance company, a banking LLP, an e-money issuer, a MiFID (i.e. Markets in Financial Instruments Directive) investment firm or a UCITS (i.e. Undertakings for Collective Instruments in Transferable Securities) management company; carries on insurance market activity; a member of an ineligible group.

A group is ineligible if any of its members is:
  • a public company
  • a body corporate (other than a company) whose shares are admitted to trading on a regulated market in an EEA State
  • a person (other than a small company) who has permission under Part IV of the Financial Services and Markets Act 2000 to carry on a regulated activity
  • a small company that is an authorised insurance company, a banking company, an e-money issuer, a MiFID investment firm or a UCITS management company
  • a person who carries on insurance market activity

Generally, small LLP accounts include:
  • a profit and loss account
  • a full balance sheet, signed by a designated member on behalf of the board and the printed name of that designated member;
  • notes to the accounts
  • group accounts (if a small parent LLP chooses to prepare them)

And they should be accompanied by an auditor's report (unless the LLP qualifies for exemption from audit and takes advantage of that exemption).
The balance sheet must contain a statement in a prominent position above the designated member's printed name and signature that the accounts have been prepared in accordance with the special provisions applicable to LLPs subject to the small LLPs regime.
Small LLPs can prepare and file simpler, less detailed accounts than those required from large and medium LLPs. Small LLPs do not have to deliver a copy of the profit and loss account to Companies House.

Medium-Sized LLP Accounts

To be a medium-sized LLP, you must meet at least two of the following conditions:
  • annual turnover must be no more than £25.9 million
  • the balance sheet total must be no more than £12.9 million
  • the average number of employees must be no more than 250

An LLP cannot be treated as a medium-sized company if it is, or was at any time during the financial year, one of the following:
  • an LLP whose securities are admitted to trading on a regulated market in an EEA State
  • an LLP that has permission under Part 4 of the Financial Services and Markets Act 2000 to carry on a regulated activity; carries on insurance market activity
  • a member of an ineligible group

A group is ineligible if any of its members is:
  • a public company
  • a body corporate (other than a company) whose shares are admitted to trading on a regulated market
  • a person (other than a small company) who has permission under Part 4 of the Financial Services and Markets Act 2000 to carry on a regulated activity
  • a small company that is an authorised insurance company, a banking company, an e-money issuer, a MiFID (ie Markets in Financial Instruments Directive) investment firm or a UCITS (ie Undertakings for Collective Investment in Transferable Securities) management company
  • a person who carries on insurance market activity
  • Medium-sized accounts must include: a profit and loss account
  • a balance sheet, showing the printed name and signature of a designated member
  • notes to the accounts
  • group accounts (if appropriate)

and should be accompanied by an auditor’s report that includes the name of the registered auditor unless the LLP is exempt from audit.
Abbreviated accounts of a medium-sized LLP to be delivered to Companies House must include:
  • the abbreviated profit and loss account (this must be full if preparing IAS accounts)
  • the full balance sheet, showing the printed name and signature of a designated member
  • notes to the accounts

The balance sheet must contain a statement, above the designated member’s printed name and signature, that the accounts have been prepared in accordance with the special provisions of section 445(3) Companies Act 2006 (as applied by The Limited Liability Partnerships (Accounts and Audit)(Application of Companies Act 2006) Regulations 2008) in regard to medium-sized LLPs.

Audit

If UK LLP is not exempt from audit, its account should be checked by an auditor, and auditors’ report should be attached to the accounts for members and Companies House.
Auditor should be a member of an authorized association.
The auditor’s report must include:
  • an introduction identifying the accounts that were the subject of the audit
  • a description of the scope of the audit identifying the auditing standards used and the financial reporting framework used in the preparation of the accounts
  • a statement as to whether in the auditor’s opinion the accounts have been prepared in accordance with the Companies Act 2006 and, where appropriate, in accordance with Article 4 of the EU Regulation on International Accounting Standards, (Regulation (EC)1606/2002, the "IAS Regulation")
  • a statement as to whether they give a true and fair view of the LLP’s or (in the case of group accounts) group’s financial affairs
  • if the auditors are of the opinion that the LLP has not kept adequate accounting records, a statement to that effect
  • if the LLP has not provided the auditors with all the information they need to complete the report, a statement to that effect

The auditor’s report must be either unqualified or qualified and include a reference to any matters to which the auditors wish to draw attention by way of emphasis without qualifying the report. The auditors will qualify the report where either there has been a limitation on the scope of the auditors’ work or where there is a material disagreement between the LLP and the auditors about the accounts.
To qualify for audit exemption, an LLP must qualify as small. In other words it must meet any two of the following:
  • annual turnover must not be more than £6.5 million
  • the balance sheet total of not more than £3.26 million
  • the average number of employee must be not more than 50

You have the same time for filing both audited and audit exempt accounts, and the law imposes the same penalties as for late filing of all other accounts.

Annual Return

Which LLPs must send an annual return to Companies House?
Every LLP must deliver an annual return to Companies House within 28 days of its made-up date. An LLP's designated members are responsible for ensuring that:
  • they deliver the annual return to Companies House
  • it gives a true picture of the LLP at the made-up date

If you do not deliver an annual return the registrar may assume that your LLP is no longer in business or operation and take steps to strike it off the register.
What is an annual return?
An annual return is a snapshot of information at the made-up date. It is separate from the LLP annual accounts. An annual return must contain the following information:
  • the name of the LLP
  • its registered number
  • the date to which the annual return is made up (the made up date)
  • its registered office address
  • the address (single alternate inspection location - SAIL) where the LLP keeps certain company records if not at the registered office, and those records are held there
  • details of all the LLP's members (corporate or individual), and whether they are designated members

What is the made-up date?
This is the date at which all the information in an annual return must be correct. The made-up date is usually the anniversary of:
  • the incorporation of the LLP, or
  • the made-up date of the previous annual return registered at Companies House

Is there a fee for filing the annual return?
Yes. There is an annual document-processing fee of £40 for paper documents or £13 for users of our Software Filing or WebFiling services which is payable when you file the annual return. LLPs that file a paper annual return should make the cheque payable to 'Companies House' and write the company number on the reverse.

LLP Tax Return

As the nominated partner you’ll get a letter from HM Revenue and Customs (HMRC) in April or May telling you to send a partnership tax return.
You can either complete the return:
  • online - you’ll need to buy software
  • on paper – download form SA800 if HMRC hasn’t sent you one

Let each partner know their share of the profits and losses so they can fill in their own tax return.
Deadlines
Send the partnership tax return by the usual Self Assessment deadlines. The main deadlines are:
  • paper tax returns - midnight 31 October
  • online tax returns - midnight 31 January
  • final payment of any tax due - midnight 31 January

If any of the partners are a company the deadlines are the same.
All the partners can be charged a penalty if the partnership tax return is late.

    Taxes of UK

    Min. rate for corporate tax 19%
    Capital gains tax Regular rate
    VAT 20%
    Withholding tax 0%/20%/20%
    Exchange control No
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