Limited Liability Partnership Accountant
Accountancy Services for Limited Companies
Fixed monthly fee online accountancy services for limited liability partnerships.
We provide online accountancy services provided for a fixed monthly fee, including services such as limited liability partnership company accounts, limited liability partnership tax returns, VAT returns, bookkeeping services, payroll services and self assessments with a fresh approach, focussed on service levels and proactive advice.
Limited liability partnership company accounting and client service that is among the best in the market
Limited Liability Partnership (LLP) Accountancy Services we Provide
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Frequently Asked Questions
An LLP, unlike a limited liability company, does not need a memorandum or articles of organisation, directors, or shareholders, and it cannot issue shares. When forming an LLP, it’s a good idea to write a limited liability partnership agreement, just like when forming a general partnership.
A partnership agreement, also known as a deed of partnership or articles of partnership, outlines how the LLP will be operated and how earnings will be distributed. It may also appoint members to manage any legislative responsibilities, such as the LLP’s tax affairs.
An LLP, unlike a limited liability company, does not need a memorandum or articles of organisation, directors, or shareholders, and it cannot issue stock.
The partnership agreement will also specify how much each member has contributed, their positions in the company, who can agree contracts and how, the procedure for members who wish to leave or if a member dies, and what happens if there is a disagreement or something goes wrong. It should also specify how any losses would be shared among the members.
If no agreement is reached, the Limited Liability Partnerships Act of 2000 shall take effect.
Each year, an annual report must be filed that includes the LLP’s contact information as well as a list of its members. If the LLP is large enough, it must also file annual accounts, which may be audited. If the company is small enough to qualify for an exemption, it can file short financial statements.
If an LLP’s members fail to file an annual return and accounts, the Registrar of Companies may believe the business has ceased to exist and strike the LLP off the register. All of the LLP’s assets become HMRCs property when it is struck off.
The partnership agreement determines the exact profit that each member receives, or they receive equal shares if there is no agreement. Each member must then file a self-assessment tax return detailing all of their earnings, including LLP profits, on which they must pay income tax and National Insurance Contributions (NICs) as self-employed persons.
LLPs with sales of more than £81,000 in a calendar year must also register for VAT. If a member is a corporation, it will pay corporation tax on its portion of the earnings, just as it would on any other form of business income.
Members who are not businesses are taxed in the same way as sole traders, general partners, and employees are. Members get a £10,000 personal allowance on which they do not pay income tax. Then, on the following £31,865 in profits, they pay the basic rate of 20%, the higher rate of 40% on profits between £31,865 and £150,000, and the additional rate of 45 percent on profits exceeding £150,000.
National Insurance Contributions are paid in two ways by members (NICs). Class 2 NICs are paid weekly at £2.75, while Class 4 NICs are determined as part of the self-assessment process and are dependent on the member’s salary.
A member’s self-assessment tax return must be submitted online by the 31st of January following the end of the tax year, which is 5 April (paper tax returns must be submitted three months earlier, by 31 October). Taxes outstanding must be paid in full by the 31st of January.
Members, like self-employed sole traders and general partnership partners, must make income tax payments on account. The payment on account is determined using the earnings from the preceding year. It is feasible to negotiate a reduction with HMRC if a member’s income appears to be significantly lower in the following year.
The advantages and disadvantages of trading through a partnership
LLPs combine the ease of use and flexibility of a general partnership with the restricted liability protection of a limited liability corporation. There are no company taxes to pay because all profits go directly to the members. An LLP’s internal agreements and management are confidential, and it has far more flexibility than a corporation.
Because the members’ liability is restricted to the amount they invested, they are not individually accountable for debts or the poor judgments of their business associates like general partners or sole traders. In addition, an LLP might raise funds for expansion by bringing on new members.
However, the administrative burden of administering an LLP is only marginally less than that of running a corporation. Along with tax returns, an annual return and accounts must be completed, and business documents must be retained. Each time a member quits or joins, Companies House must be notified.
When the LLP’s profits reach a particular level, its members will begin to pay higher and additional rate income tax, as well as NICs, on their earnings. A limited company can provide a more tax-efficient structure for extremely profitable firms in certain circumstances.