A partnership, as well as the individual partners making up the partnership each have resepective tax registrations. This means that a minimum of 3 tax returns are required for each partnership (i.e one for the partnerships and 1 for each of the partners.) The partnership itself does not pay tax or national insurance (although it may pay vat if so registered for vat). First of all the accounts of the partnership are drawn up detailing all incomes and expenses so that a net profit is arrived at. Capital allowances are then calculated and as a result a taxable net profit is arrived at. Each partners share of this net profit is then calculated. The split of  the net profit is recorded inthe partnership tax return as well as in each partners tax return. So each partner is effectively taxed as if he were a self employed business, with profits equal to his share of the profits of the firm.