Promoted to partnership? Here are some considerations for you

Being promoted to partner is a time to celebrate and reflect on your hard work over the years. However, becoming partner brings with it various tax obligations and other considerations.

In particular, you may become self-employed for tax purposes, which means that you will need to register with HMRC and start submitting self-assessment tax returns. Whilst this does mean that tax would no longer be payable under PAYE, you will need to be aware of the tax due to be paid twice yearly on 31 January and 31 July. If you become a member of a limited liability partnership (LLP), there are also additional anti-avoidance rules to consider.

Aside from purely tax-related implications, you are likely to be ineligible for some or all of your existing company benefits and may sacrifice certain employment rights. In addition, you will need to consider how being promoted to partner might affect your eligibility for contributions into your company pension scheme.

For further details on the factors that you should consider, please refer to our factsheet here.
 

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