Partnership converts to LLP

Partnership converts to LLP

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A partnership has converted to an LLP.

No advice taken by client they just did it and have only just notified us.

Do we need to apply for a new UTR?

I rang HMRC to query but they said no.

What do you think?

Replies (5)

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By MJShone
18th Oct 2012 09:15

No need for a new UTR

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By mbdx7ja2
18th Oct 2012 09:41

The only tax affected
is VAT, as the LLP is a taxable person in its own right now, rather than the partners.

For all other taxes as an LLP is transparent, as far as HMRC is concerned nothing has happened and the partnership is continuing as before.

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By eastangliantaxadvisor
18th Oct 2012 14:00

I would argue that the fact that the LLP is a seperete legal entity that there is a requirement to inform HMRC, and they may well set up a new record.

 

Only guidnace I could find in the manuals is

 

Where an old partnership incorporates as a LLP during an accounting period then, if the partners so wish, they need only make a single partnership return for the one tax year. They may do this even if the partnership changes its accounting date. The old partnership and the new LLP also need only make a single PAYE return for the tax year in which the old partnership incorporates as the new LLP

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By MJShone
18th Oct 2012 14:34

It's certainly a separate legal entity

What I've done in the past in practice is file a return in the name of the LLP but under the old partnership's UTR. (Consistent with the guidance quoted by mbdx7ja2, which started out as a Tax Bulletin in December 2000.) I included a note in the white space explaining that the conversion had happened on a particular date during the year and that the new LLP had not previously traded.

Meantime, HMRC had issued a tax return in the name of the LLP with a different UTR. They subsequently cancelled this. (This was presumably generated automatically when Companies House informed HMRC of the new LLP.)

You do need a new PAYE scheme but this can be treated as a succession so that no P45s are needed and only one P35 is required at the end of the year, in the LLP's name/new reference.

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By Swedish Chef
18th Oct 2012 15:08

You don't need to notify HMRC....

....because Companies House do it for you automatically.

A senior manager at HMRC advised me that an SA record will be set up for the LLP automatically and a UTR allocated accordingly.  If the reason the LLP has been formed is to succeed a partnership then just tell HMRC which UTR you are going to use and file under that one.  They don't care which.

WE know that a p'ship is becoming an LLP, but THEY don't and nor do CH.  It is perfectly feasible for the LLP to either run alongside a partnership, or even have nothing to do with a p'ship of the same name.  That's why they set it up with a UTR and await instructions.

The real difficulty we found was that a 64-8 cannot be processed without the UTR - so you either have to make sure that you educate the client to give it to you, or (as we do now), always set them up with your own premises as the Reg Office and change it later.

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