I formed an LLP for my band on 4th March 2016 with four other members, but didn't start trading until June. I received a letter with a UTR but so far we haven't registered individually for self assessment. Do we need to fill in tax returns for March, even through we had no transactions for the month after incorporation. The business accounting period runs until 31 March 2017, so we are good on that front but I am worried about individual tax returns and the possibility of a fine for not registering.
Thanks, Jack
Replies (4)
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You and your fellow members may have other reasons for having to complete 2015/16 tax returns, but you don't have to complete them because you have profits from your new LLP to pay tax on, because there aren't any.
Whilst John's answer is completely accurate in accordance with the legislative requirement, HMRC don't seem to know the legislation, and may insist on a Return anyway.
In practice, register for self assessment (if not already registered) from the date (in 2016/17) when the LLP started to trade.
LLP is required to submit a return for the year ended 5 April 2016 as trading income is not necessarily the only income of a partnership. Any investment income has to be declared on a fiscal year basis as opposed to accounts basis.
If it is a nil return you may not need to complete personal returns but it would depend on the level of income.