[Update – 31st March] On the 27th March, the Finance Bill 2014 was published. There is a seperate document that deals with salaried memebrs of LLPs and it is available here.

Originally posted on 30 Dec 2013

The Law Society has added its voice to concerns about the pace and extent of the government’s plans to clamp down on the misuse of LLP membership status to avoid tax.

Following an announcement in the Chancellor’s autumn statement, a draft finance bill published this month sets out proposals for identifying members of LLPs who will be regarded as ‘salaried members’ from 6 April 2014. From then onwards, they will be treated as employees for tax purposes. Operating PAYE by deduction, higher NIC costs – professional firms operating as LLP should sit up and take notice of these changes.

Gary Richards, chair of the Law Society’s tax law committee, described the plan as ‘extremely concerning’ and said the proposals from HM Revenue & Customs ‘do not take account of the variety in which partners operating via LLPs conduct their businesses and could pose very practical difficulties, both for firms and HMRC.

The draft legislation is open for technical consultation until 4 February.

For more information, view the full news story (dated 23 December) on Bizezia News for accountants and for lawyers.

Martin Pollins

Managing Director at One Smart Place
Martin Pollins is a Chartered Accountant and MBA with wide experience in corporate finance and business management. He has served on the boards of several companies, including those listed on the London Stock Exchange, AIM and OFEX. He is Chairman and Founder of OneSmartPlace and was a Council member of the Institute of Chartered Accountants in England and Wales from 1988 to 1996. He was managing partner of PRB Martin Pollins, based in Sussex, the first Accountancy firm to advertise on British television.He went on to create and launch the CharterGroup Partnership (the UK’s first Accountancy network) and then LawGroup UK (at the time, one of the largest networks of lawyers in the UK). In recent years, he helped to raise several £millions to fund British films such as The Da Vinci Code, Bridge of San Luis Rey, Head in the Clouds and Merchant of Venice with actors such as Charlize Theron, Robert De Niro, Al Pacino, F. Murray Abraham. Kathy Bates, Gabriel Byrne, Geraldine Chaplin, Tom Hanks, Ian McKellen, Audrey Tautou, Penélope Cruz, Steven Berkoff, Lynn Collins, Jeremy Irons, Joseph Fiennes and many more.

He has written over 700 business publications (see Glossaries at http://onesmartplace.com/resources/glossaries/) and is editor of Better Business Focus (see http://onesmartplace.com/resources/better-business-focus-magazine). His Blog, on a wide range of subjects can be found at: http://onesmartplace.com/blog/
Martin Pollins

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