LLP Formation

Both offer limited liability, but LLPs are generally more flexible. LLPs have members instead of shareholders, and profits are taxed through Self Assessment rather than Corporation Tax.

A limited company can sometimes be more tax-efficient for retained profits or if you plan to raise investment, while an LLP is better for professional partnerships or joint ventures where profits are distributed annually.

• Limited liability: Protects members’ personal assets from business debts.

• Flexible profit sharing: Members decide how profits are split.

• Credibility: LLPs look more professional than informal partnerships.

• Tax transparency: Each member pays tax only on their share of profits, avoiding double taxation.

• Ease of management: No share capital, directors, or company secretary required.

You can claim any costs that are wholly and exclusively for business use - such as office rent, travel, marketing, professional fees, and software like Xero. These reduce your taxable profit and help keep your LLP as tax-efficient as possible.

You’ll need at least two designated members. They share responsibility for filing accounts, maintaining records, and submitting the LLP’s annual tax return.

No - LLPs don’t pay Corporation Tax. Instead, profits are divided between members and taxed through each member’s Self Assessment.

Yes, if the LLP’s turnover exceeds £90,000 in any 12-month period. We’ll handle VAT registration and ensure digital filing through Xero.

Your LLP must:

• File annual accounts with Companies House

• Submit a Confirmation Statement each year

• File a Partnership Tax Return (SA800) with HMRC

• Ensure each member files their own Self Assessment (SA100)

Yes. An LLP can hire staff, use subcontractors, and even register for PAYE if members receive salaries rather than drawings.

Members typically take drawings (their share of profit) rather than salaries. Salaries can be paid if agreed in the LLP Agreement, but are treated as business expenses only if they’re contractual and justified.

Yes. We can manage the full conversion from closing your existing partnership with HMRC, transferring assets, and registering your new LLP with Companies House.

Choose an LLP if:

• You’re working with one or more partners.

• You want flexibility in profit distribution.

• You prefer a transparent tax structure.

Choose a Limited Company if:

• You plan to retain profits in the business.

• You might raise investment or add shareholders.

• You want to take income via salary and dividends. We can assess your situation and recommend the most tax-efficient and practical option.