File LLP Accounts & Tax Return

Yes, Limited Liability Partnerships (LLPs) are required to file annual accounts with Companies House. These accounts must include a balance sheet and financial statements, and they should be submitted each year, even if the LLP has not traded. Additionally, LLPs must also file an annual return with HMRC for tax purposes.

A member of an LLP is however taxed on his or her share of the profits that are generated by the partnership. Thus, LLP members are required to report their share of the LLP’s profits on their self-assessment tax returns. They pay income tax based on their total income at rates of 20%, 40%, or 45%.

Designated members are responsible for filing an LLP’s first accounts with Companies House within 21 months of the date of incorporation (if the accounts cover a period more than 12 months) or within 9 months of the accounting reference date (ARD). The deadline is calculated to the exact day, rather than the end of the month the accounts are due.
However, for HMRC, the Self-Assessment tax return for the LLP members is due by 31 January following the end of the tax year (which runs from 6 April to 5 April).
If you file the tax return by paper, the deadline is 31 October.

No, LLPs (Limited Liability Partnerships) do not pay Corporation Tax in the UK. Instead, LLPs are treated as “transparent” entities for tax purposes. This means that the LLP itself does not pay tax on its profits. Instead, each member is personally taxed on their share of the LLP’s profits, which are reported through their individual Self-Assessment tax returns.

Any expense incurred wholly and exclusively for business is deductible. In an LLP, allowable expenses include operating costs like office rent, utilities, supplies, and insurance, as well as employee-related expenses such as salaries, benefits, and training. Marketing and advertising costs, travel, meals, and client entertainment are also deductible. Professional fees, such as legal and accounting services, and costs related to goods sold, like raw materials and manufacturing, are allowed. Interest on business loans, charitable contributions, and miscellaneous expenses like bank fees or office cleaning are also generally deductible.
However, non-allowable expenses include personal expenses (e.g., vacations or home improvements), capital expenditures for long-term assets (like buildings or machinery), penalties and fines, and non-business expenses unrelated to the core operations of the LLP, such as personal investments or hobbies.

In addition to capital punishments, there are other serious risks associated with late filing. If your LLP consistently fails to file accounts, Companies House may strike your business off the register, which effectively dissolves the LLP. This could result in the loss of assets and a damaged reputation. Furthermore, the members may face legal consequences for non-compliance.