Business partners who miss October 5th deadline face £1.5k fine

Business owners running a business partnership should put a red circle around October 5th as this is the deadline for registering for self-assessment.

The date is pertinent for individuals who entered a business partnership in the 2024/5 tax year. Only one individual needs to register the partnership with HMRC but, importantly, both the founder and their “nominated partner” must register for Self Assessment individually.

This, alongside registering a company name, is where businesses can quickly get themselves into trouble if they are not compliant.

Getting your admin right

Any business owner who enters into a business partnership must choose a ‘nominated partner’. This partner manages tax returns, business records, and VAT registration if the firm’s VAT taxable turnover exceeds £90,000.

However, it is the partner who registers the business who must declare the partnership’s profits and deduct any allowable expenses. They can do this using the partnership’s Unique Taxpayer Reference (UTR), which is different from their individual UTR.

It gets confusing as both the partnership tax return and each partner’s individual return have the same filing deadline. Getting them muddled “… is a classic way to cause delays and trigger penalties,” says Joe Phelan, money.co.uk business bank accounts expert.

Phelan also recommends opening a business bank account as this keeps business and personal finances separate from each other. “It’s the single best way to have a clear, simple record when it’s time to do your taxes,” he adds.

Self-Assessment myths

Phelan suggests that this deadline is a perfect opportunity to tackle all things tax for your business, whether a partnership or not. This is not least because businesses are facing changes as the Government pushes ahead with its Making Tax Digital plan.

Roll-out starts for some in April and reforms include quarterly income reporting and the keeping of digital records initially for those above the £50,000 threshold.

Like Phelan, Pauline Green, Head of International Compliance at Intuit QuickBooks, emphasises the need for partnerships to be registered before the October deadline; whether they are planning on filing online or on paper.

She adds, though, that business owners also need to think ahead to the self-assessment deadline in January, whether they are in a partnership or not.

She explains that individuals need to fill in a self-assessment form if they have “untaxed income from any other sources such as from property, dividends, or side hustles”. They might also need to fill in a form if the interest from their savings hits a certain level.

She adds: “Even if you’re employed and paying higher-rate tax through PAYE, you may still need to file a Self Assessment if you have additional untaxed income, such as rental income or large investments.”

The emphasis from both experts is that missing this October deadline – and the January deadline for partnerships and non-partnerships alike – will trigger penalties and complications with your submission when you finally register or file.

Missing the October deadline won’t leave you off the hook, but will just mean that you’ll still need to register and will be landed with a penalty for tardiness.