What is an SA401 Form?
Fill out form SA401 to register with HMRC as an individual partner in a self-assessment partnership. The information you provide will help HMRC properly set up its tax records. Each partner is responsible for their own individual income tax and social security.
What Is SA 401 Contain
SA 401 is divided into three parts; Information about the partner, information about the association, and an explanation. The member must provide their name, address, phone number, and national insurance number. The member must justify if they have not been assigned a National Insurance Number. The partner must also submit their unique tax reference (UTR). The full name and address of the association must be provided, as well as the UTR of the association. In the case of limited liability companies, indicate the commercial registration number. It should be indicated if the partners receive benefits from the company and share the losses and/or if the company is in the equity fishery.
The last part is a simple statement in which the partner declares that he has provided all the information to the best of his knowledge and belief. The partner assumes the legal obligation to inform HMRC of any subsequent change in circumstances or knowledge of the inaccuracy of a reported fact. You must also provide the filing date of this SA 401.
What Other Forms Does An Association Need To Fill Out For HMRC?
When a partnership is formed by two or more partners, one of the partners becomes the "designated partner." It is the responsibility of the Designated Partner to complete and submit an SA400 form that records the actual connection with the HMRC as a self-assessment body.
However, it is the responsibility of all club members to fill out and submit their own SA401. Affiliates who are a corporation or other partnership must complete and submit an SA402 form.
When submitting your SA401 form, you must also submit a 64-8 form to empower an agent to act on your behalf if a representative acts on behalf of the partnership and one of the partners, separate power of attorney form is required for the parent company and each partner.
Tax Returns for Companies
Each year, the designated partner will complete and submit a partnership statement for the company. Each partner must also complete and submit their own tax return for self-assessment, indicating their share of profits and other income.
In addition to filing a partnership tax return, the designated partner must prepare a partnership return. This describes the distribution of profit or loss among the partners of the company and helps each partner to complete their individual tax return for self-assessment.
If the main tax return of the partnership is filed late or incorrectly, the fines received will be borne by all partners and not just the nominated partner.
What Are the Pros And Cons Of Starting a Trade Association?
Although a partnership is a relatively easy way to start a business, each partner is personally liable for business debts.
It is advisable to write a collaboration agreement at the beginning of the relationship. This legal document defines the responsibilities of each partner so that everyone understands his duties. It also shows the amount of capital raised by each partner and his share of the profits. The document is not a legal requirement, but it can be invaluable if a partner retires or if problems arise.
The partners often run the business themselves and share responsibility. In some cases, there may be a "sleeping partner" who contributes capital but does not share in the day-to-day management. The sleeping partner remains liable for all debts, just like a normal partner.
Appointing an Agent
If an affiliate wishes to authorize a representative to act on their behalf, they must also complete Form 64-8. Alternatively, your agent can set up an online self-assessment for you. Each partner must separately authorize their authorized representative to manage their tax affairs. The authorization of the representative of the company itself does not extend to the tax affairs of the partners. 64-8 is available for download from the HMRC website.