To register a business partnership with HMRC, the nominated partner registers the partnership itself for Self Assessment (online or on form SA400), and every partner then registers individually (form SA401). You must register by 5 October in the partnership's second tax year, or you risk a failure-to-notify penalty. Registration is free and gives the partnership its own Unique Taxpayer Reference (UTR).
This guide covers the full 2026/27 process: who does what, the deadlines, the forms, how much tax each partner actually pays, and whether a partnership has to join Making Tax Digital.
What is a business partnership?
A partnership is a business structure where two or more people share responsibility for the business, its profits and its debts. Each partner is self-employed and pays tax on their share of the profits through their own Self Assessment return. The partnership is not a separate legal entity, unlike a limited company, but HMRC still treats it as a separate taxpayer, so there are two layers of registration: the partnership, and each individual partner.
An ordinary partnership is the structure covered here: you register it with HMRC, not Companies House. A limited liability partnership (LLP) is different, it is incorporated at Companies House, files accounts there and gives its members limited liability, though those members are still taxed individually through Self Assessment. The steps below are for ordinary partnerships. If you are weighing this up against going it alone, our guide for sole traders explains how the structures compare on tax and admin.
Partnership vs sole trader vs limited company: who registers with whom?
The three common UK structures register in different places and are taxed differently. A sole trader and an ordinary partnership both register with HMRC for Self Assessment and are taxed on profits personally; a limited company registers at Companies House and pays Corporation Tax on its profits. The choice affects your tax, admin and personal liability, so it is worth getting right before you register.
| Structure | Register with | Taxed on | Separate legal entity? |
|---|---|---|---|
| Sole trader | HMRC (Self Assessment) | Your profits, personally | No |
| Ordinary partnership | HMRC (the partnership and each partner) | Each partner's profit share, personally | No |
| Limited company | Companies House and HMRC | Company profits (Corporation Tax) | Yes |
Not sure you even need to file? Our guide on whether you need to do a Self Assessment walks through who HMRC expects a return from.
Who is the nominated partner?
The nominated partner is the partner chosen to handle the partnership's tax affairs. Their job is to:
- Register the partnership with HMRC.
- Send the annual Partnership Tax Return (SA800).
- Keep the partnership's business records.
The other partners do not register the partnership, they only register themselves as partners and file their own personal returns. Pick the nominated partner before you start, because their details go on the partnership registration.
How to register a partnership with HMRC: step by step
Step 1, Register the partnership (nominated partner)
The nominated partner registers the partnership for Self Assessment, either online through HMRC's service or by post using form SA400 if you cannot register online. HMRC then issues the partnership's own UTR. You will need the partnership name, the nature of the business, the start date of trading and the nominated partner's details.
Step 2, Register each partner individually
Every partner, including the nominated partner, must register as a partner using form SA401 (or online). Each partner receives their own UTR if they do not already have one, and files a personal Self Assessment return (SA100) showing their share of the profits. If a partner is not an individual, for example a company, another partnership or a trust, use form SA402 instead. It must be signed by the person responsible for that partner, such as the company secretary or a trustee, per HMRC's SA402 guidance.
Step 3, File the returns each year
Once registered, the partnership files an SA800 return, and each partner reports their share on their personal SA100 with the partnership supplementary pages. Our guide to the partnership tax return (SA800) walks through exactly what the nominated partner files each year.
| Who | Form | Registers / files |
|---|---|---|
| Nominated partner | SA400 (or online) | Registers the partnership |
| Each individual partner | SA401 (or online) | Registers as a partner |
| Corporate / non-individual partner | SA402 | Registers as a partner |
| The partnership | SA800 | Annual Partnership Tax Return |
| Each partner | SA100 + partnership pages | Personal Self Assessment return |
When is the deadline to register a partnership?
You must register by 5 October following the end of the tax year in which the partnership started trading, in practice by 5 October in the partnership's second tax year. For example, a partnership that began trading in the 2026/27 tax year must register by 5 October 2027. Miss it and HMRC can charge a failure-to-notify penalty based on the tax owed, so register early. For the full official process, see HMRC's guidance on how to register the partnership with HMRC.
How partnership tax works in 2026/27
The partnership itself pays no tax. Instead, profits are split between the partners according to your profit-sharing agreement, and each partner is taxed individually. The key 2026/27 figures that affect each partner:
| Allowance / threshold | 2026/27 |
|---|---|
| Personal allowance | £12,570 |
| Basic rate up to | £50,270 |
| Additional rate from | £125,140 |
| Trading allowance | £1,000 |
| VAT registration threshold | £90,000 |
| Annual Investment Allowance | £1,000,000 |
These Income Tax thresholds are frozen until 5 April 2031. The trading allowance stays at £1,000 for 2026/27 and rises to £3,000 from 6 April 2027, although it rarely helps partners because it generally cannot be set against a share of partnership profits.
How is a partner's tax worked out in practice?
Take a partnership with profits of £90,000 for 2026/27, shared equally between two partners under a 50/50 agreement. The partnership itself pays no tax; each partner is taxed on their £45,000 share through their own Self Assessment return.
| Per partner (£45,000 share) | 2026/27 |
|---|---|
| Profit share | £45,000 |
| Personal allowance | £12,570 |
| Taxable income | £32,430 |
| Income Tax (20% × £32,430) | £6,486 |
| Class 4 NIC (6% × £32,430) | £1,945.80 |
| Class 2 NIC (share above £7,105 SPT) | £0 (qualifying year, nothing to pay) |
| Total per partner | £8,431.80 |
Each partner pays Class 4 National Insurance at 6% on profits between £12,570 and £50,270, and 2% above £50,270, for 2026/27. Class 2 is no longer compulsory: a partner whose share is at or above the Small Profits Threshold of £7,105 banks a qualifying year towards the State Pension with nothing to pay. Because the £45,000 share sits entirely within the basic-rate band, neither partner crosses the £50,270 higher-rate threshold, so all of the taxable profit is charged at 20%. If the split were unequal, say 70/30, the higher-earning partner could be pushed into the 40% band on the slice of their share above £50,270, which is why the profit-sharing ratio matters for tax as well as for fairness. The full rates and thresholds are set out in our note on self-employed National Insurance for 2026/27.
A few practical points:
- The £1,000 trading allowance generally cannot be claimed against partnership profits, it is mainly for casual self-employment, so most partners deduct actual expenses instead (see our list of allowable expenses for what each partner can claim).
- If partnership turnover exceeds the £90,000 VAT threshold, the partnership must register for VAT separately.
- Capital spending on equipment can be relieved through the Annual Investment Allowance (up to £1,000,000).
Does a partnership need to do Making Tax Digital?
No, not yet. Making Tax Digital (MTD) for Income Tax does not currently apply to partnerships, and HMRC has not set a start date, so an ordinary partnership carries on filing the SA800 Partnership Tax Return as it does now. HMRC has confirmed partnerships will be brought into MTD at a future date, to be announced.
There is one catch for individual partners. A partner who has other qualifying income, for example self-employment or rental income outside the partnership, may still have to use MTD for Income Tax personally. MTD applies from 6 April 2026 to sole traders and landlords with qualifying income over £50,000, dropping to over £30,000 from April 2027 and over £20,000 from April 2028. Our guide to Making Tax Digital for Income Tax explains who is caught and when.
What records do partners need to keep?
Each partner should keep records of:
- Sales and income.
- Business expenses, including business mileage (claimed at 55p per mile for the first 10,000 miles, then 25p).
- VAT records, if registered.
- Their profit-share calculations.
Good records make both the SA800 and each personal SA100 far quicker to complete, and cheaper if an accountant prepares them.
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Frequently asked questions
Do all partners need to register, or just the nominated partner?
Both. The nominated partner registers the partnership for Self Assessment, and then every partner, including the nominated partner, must separately register as an individual partner and file their own personal return.
What is the deadline to register a partnership with HMRC?
You must register by 5 October in the partnership's second tax year, meaning 5 October following the end of the tax year in which the partnership started trading. A partnership that began trading in 2026/27 must register by 5 October 2027, or HMRC can charge a failure-to-notify penalty based on the tax owed.
How long does HMRC take to process a partnership registration?
HMRC does not publish a fixed turnaround for partnership registration. Check GOV.UK's 'when you can expect a reply from HMRC' tool for the current timescale, and allow a couple of weeks for your UTRs to arrive, longer in busy periods such as the run-up to the January filing deadline.
What is the difference between SA400, SA401 and SA402?
SA400 registers the partnership itself and is completed by the nominated partner. SA401 registers an individual partner for Self Assessment. A non-individual partner, such as a company or trust, uses SA402 instead.
Can I register a partnership online instead of by post?
Yes. HMRC's online Self Assessment service lets you register both the partnership and the individual partners. The SA400, SA401 and SA402 paper forms are mainly for those who cannot use the online route. You will need a Government Gateway user ID to register online.
Does a partnership have to use Making Tax Digital?
Not yet. MTD for Income Tax does not currently apply to partnerships and HMRC has not announced a start date, so you carry on filing the SA800. An individual partner can still be caught personally if they have other qualifying income over the MTD threshold.
Need a hand getting it right?
Registering a partnership is straightforward in theory, but the two-layer registration, the 5 October deadline and getting each partner's UTR in place trip a lot of people up. If you would rather have it done correctly the first time, registration, the SA800 and each partner's return, get in touch with Zmartly to book a free call and we will handle it all. You can also browse our FAQ for quick answers on Self Assessment and partnerships.
