Abbey

Chartered Tax Advisers
Old Bishops' College
Churchgate
Cheshunt
Hertfordshire
EN8 9XP

T: 01992 642024

E: abbey@abbeyaccountants.com

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      LLPs

What is an LLP?

Like a partnership an LLP is two or more people in business together.  The difference however is that for legal purposes it is a corporate entity and gives the benefit of limited liability to its members.  For tax purposes it is treated identically to a normal partnership.   There are additional requirements to comply with the Companies Act and to submit accounts and related documents to Companies House on an ongoing basis. Partners in LLPs are known as Members.

Members' Agreement

It is strongly recommended that a members' agreement is put in place.  This would normally set out the profit sharing between the members, how management decisions are made and the position when there are new members or when members leave for whatever reason. If no members' agreement is put in place the Limited Liability Partnership Act 2000 comes into force automatically and among others things it assumes that profits are split equally between the partners. Advice should be sought from us in the first instance in this connection.

Company secretarial services

A business carried out via a limited liability partnership has obligations to maintain and submit to Companies House certain statutory documents including year end accounts and annual return forms.  Failure to comply with deadlines results in punitive penalties. We offer you peace of mind by carrying out your company secretarial duties and ensuring that the legal obligations are wholly complied with.

Bookkeeping

Preparing bookkeeping records can be a time consuming and onerous task for business owners, we can help with all your general bookkeeping requirements either at your offices or at ours. We can either employ our own in-house expertise or help you recruit the right person for your business.

Management Information

Regular management information is a vital aspect of managing and controlling a business. We will endeavour to work closely with you to get to know your business so that we can advise on how to maintain and improve profits as the business grows and develops. Monthly or quarterly management accounts can be prepared to enable you to manage your business.

VAT

For turnover in excess of £83,000 it is compulsory for most businesses to be registered for VAT although it is possible to register voluntarily below that limit. All businesses now have to prepare return forms (generally each quarter) and submit them online. In addition to the bookkeeping we can deal with all aspects of your VAT requirements and ensure that the VAT regulations are fully complied with. Our VAT services cover registering and de-registering for VAT, preparation of accurate VAT returns, review of assessments and ascertaining whether the flat rate scheme would be appropriate or advantageous.

PAYE

Employing staff results in a legal requirement to operate a PAYE/RTI scheme. We offer a payroll service using Sage software and this involves a weekly or monthly service, advising on the PAYE and national insurance deductions, issuing payslips, forms P45 and P60. In addition the year end PAYE report is automatically prepared by our systems ready for online submission.

Year End Accounts

For commercial and tax purposes it is necessary to prepare financial accounts for the period of trading which is normally for a 12 month period ending on the 31st March or 5th April.  This gives a historic  summary of what the business has achieved during this period and also forms the basis for the calculation of the tax liability arising thereon. 

Self Assessment

A self assessment tax return form will have to be completed for the LLP showing the business income and expenditure in accordance with the accounts prepared.  In addition a self assessment return form will have to be prepared for each individual member disclosing the individual's full income for the tax year including his or her share of the LLPs profits. These returns have to be submitted to HMRC by 31st January following the tax year end.  For example, for the 2013/14 tax year the return is due for online submission by 31st January 2015. 

Personal Tax

A member's LLP profits are added to their other personal income to arrive at the total income taxable on them as an individual. The annual personal allowance of £11,000 is deducted to arrive at the net taxable income. The income tax rates currently applicable are 20% from £0 - £32,000, 40% from £32,001 - £100,000, 60% from 100,000 - £122,000, 40% from £122,001 - £150,000 and 45% from £150,000 onwards. 

National Insurance

A member pays both class 2 and class 4 national insurance.  Class 2 national insurance is £2.80 per week.  Class 4 national insurance is 9% on net business profits between £8,060 and £43,000.  Over £43,000 the rate is 2%. Class 2 and 4 national insurance is payable at the same time as the income tax (see below).

Payment of Tax/Class 2 and 4 National Insurance

Payment of tax and class 4 national insurance is every 6 months on 31st January and July.  When a business first commences, depending on timing, there can be a long period before tax becomes payable and it is paramount that a tax reserve is retained on an ongoing basis to avoid cash flow problems in the future. 

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