Accountancy firm support Peers' calls for tax reform to be delayed till next year
Accountants Baker Tilly have backed Peers’ calls for new LLP tax legislation to be delayed until April 2015 and include overseas LLPs.
The proposed new test to check whether LLP members should be treated as partners or employees for tax purposes is due to come into force in April 2014. The test would make many LLP members liable for income tax and national insurance contributions (NICs), and the LLP liable for employer NICs.
A recent report by a House of Lords sub-committee recommended that a fuller consultation be carried out to make sure the legislation was properly targeted.
In a briefing note, George Bull, chair of professional practices at Baker Tilly, said: “Firms have already invested considerable amounts of management time and professional fees in an attempt to address the draft legislation and manage the impact the legislation may have on their firm.
“HMRC published revised draft legislation in the form of the Finance Bill 2014, giving firms a three month grace period for funding arrangements. Is HMRC at a point of no return? We think so, but welcome the Lords’ support of the professions’ concerns.”
The firm and others giving evidence to the Economic Affairs Committee’s Finance Bill Sub-Committee called for existing case law on general partnerships to be used instead.
