Fixed share partners at smaller law firms are considering jumping ship to avoid the capital requirements of new tax rules.
According to recruitment firm Edward Drummond, those partners must pay at least 25% of their annual earnings to their firms by 5 July in order to prove they are self-employed and therefore not liable for income tax and National Insurance Contributions. Some are therefore looking to move to larger firms which can help them meet the cost through low-interest loan schemes.
Dan Watts, director at Edward Drummond, says: “While large law firms have had little problem providing low cost bank loans to allow their fixed-share partners to make the capital contributions demanded by HMRC, fixed-share partners at smaller firms are struggling.”
