Investopedia defines an LLP as:
‘’Limited liability partnerships (LLPs) allow for a partnership structure where each partner’s liabilities are limited to the amount they put into the business.’’
Under the LLP structure, two or more partners work in tandem, pooling capital, leveraging each member’s expertise and competence, splitting the operational and managerial costs, and pocketing the rewards of limited liability protection.
Even if the partnership ends in a vain pursuit, debt collectors or creditors cannot claim a member’s personal assets or income.
Moreover, businesses like medical professionals and law and accounting firms cash in on the tax and limited liability benefits accompanying an LLP.
Are you also considering incorporating an LLP?
Read our thorough guide on How to Set Up an LLP in the UK.
The Limited Liability Partnership Act 2000 governs the incorporation of limited liability partnerships (LLPs) at Companies House. Subsequently, there are several filing requirements for an LLP at Companies House, fulfilling which is mandatory to ensure compliance with Companies House and HMRC obligations.
Accordingly, this blog will walk the designated members through all the filing and reporting requirements for their LLP company so that all partners stay highly compliant with the statutory Companies House obligations.
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Filing requirements for an LLP at Companies House:
The following are the compulsory filing and reporting requirements the designated members must ensure compliance with, including:
Submitting self-assessment tax returns to HMRC:
To begin with, an LLP is a pass-through entity: it relegates both the income tax and filing obligations to its founding members rather than itself. Subsequently, it is obligatory for every member of an LLP to register for self-assessment individually with HM Revenue and Customs (HMRC).
Next, they determine the correct amount of Income Tax on the earnings they have obtained personally as a result of the partnership. Thereafter, timely reporting and payment of the Income Tax and National Insurance Contributions owed is also essential.
It is worth emphasising that by registering for self-assessment, LLP members can expeditiously determine the correct Income Tax amount and National Insurance contributions owed, report and pay their income timely.
Furthermore, fulfilling this requirement ensures that each member of the LLP stands tax-liable for the share or value of profit the partnership generates. Therefore, by registering for self-assessment and submitting tax returns, each member upholds the tax system’s integrity while maintaining transparency in their fiscal duties.
In a similar manner, the designated members of the LLP are also required to register the LLP for self-assessment. They file a partnership tax return, reporting the business’s overall income. Notably, the business’s total income incorporates the aggregated or combined personal income of all members.
Submitting LLP account statements to Companies House:
Another major step in meeting the filing requirements for an LLP at Companies House is preparing account statements annually and delivering them to Companies House.
The LLP account statements comprise the pertinent information regarding the partnership’s earnings/revenue and all concerning operations in the preceding financial year,
including:
- A profit and loss statement with a balance sheet.
- Account notes and an auditor’s report are required unless the LLP is exempt from audits.
Maintaining updated registered information at Companies House:
It is significant for the LLP members to send a confirmation statement to Companies House at least once a year to verify that all LLP information registered with Companies House and disclosed on public record is accurate and updated.
For greater clarity, you must check and validate the following information on the confirmation statement:
- LLP name
- Registered office address
- The location of the statutory registers
- List of all LLP members and their designation.
- Details about all individuals with significant control (PSCs)
- Relevant Standard Industrial Classification (SIC) codes
Finally, you can file confirmation statements for an LLP online or deliver them via post. However, filing it online is a speedy option.
Notifying any changes made to the LLP:
It is commonplace for an LLP to undergo multiple changes or modifications during its lifetime. However, it is vital to notify certain changes to Companies House. It ensures that the registered information is up-to-date. Most of these changes are to be reported within a fortnight.
Likewise, designated members must ensure that all relevant changes have been updated in the LLP’s statutory registers and verified on the next confirmation statement.
Lastly, the changes, if made in the LLP, must be reported include: the LLP name, registered office address, SAIL address, SIC codes, address for statutory registries, LLP partners’ information, and Accounting reference Dates (ARD).
Maintaining LLP statutory registers:
Maintaining certain statutory registers is another key part of the filing requirements for an LLP at Companies House. Elaborating, these statutory LLP registers include the LLP members register, LLP members’ residential addresses register, and People with Significant Control (PSC) register.
Moreover, an LLP can keep statutory registers at their registered office. Alternatively, the registers could also be maintained at SAIL or on the public register at Companies House.
Lastly, a Single Alternative Inspection Location (SAIL) is an address that the LLP partnership designates to maintain the statutory registers.
Registering for VAT:
If the LLP’s annual turnover or revenue, which is taxable, surpasses the figure of £90,000, it is legally liable to register for VAT with HMRC. It may be pertinent to mention that £90,000 is the threshold for VAT registration effective from 1 April 2024.
Besides, while the LLP collects and pays VAT, individual members or partners personally involved in the LLP’s VAT operations must pay VAT to HMRC, report VAT on their self-assessment returns, and maintain correct VAT records and accounts.
Managing PAYE (Pay as you earn) system:
As per the principal, an LLP is designed to be run by members who operate as self-employed individuals. Nevertheless, certain circumstances might arise, warranting it to become an employer. To illustrate, an LLP becomes an employer if it hires other staff, utilises subcontractors via the Construction Industry Scheme (CIS), or if some of its members are deemed salaried employees.
Under such scenarios, an LLP must register itself with HM Revenue and Customs (HMRC) as an employer to operate the Pay As You Earn (PAYE) system to govern the financial matters of employed members.
Concluding remarks:
To recap, it is indispensable for an LLP to meet several filing requirements at Companies House. Accordingly, to make your filing and reporting obligations a breeze, book a consultation with the seasoned and proficient accountants listed on the Accountingfirms website.
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Disclaimer: The information provided on AccountingFirms.co.uk is for informational purposes only and should not be considered as financial advice. Always consult with a professional accountant to ensure compliance with UK laws and regulations.