Video:

Changing-tax-rules-for-professional-practices-and-partnerships

Tax law – Changing rules for professional practices and partnerships

Author: Pamela Sayers, James Kirk (yBC.tv)

Categories: Governance, Tax Planning
Tags: HMRC, LLP, NI

Tax Law has changed and this affects professional practices. Pamela Sayers from Smith & Williamson discusses some of these changes in this TV show:

Tax law in the UK

I think this year we’ve seen some huge changes in the taxation of professional practices, and perhaps the first greatest change for perhaps sixteen years, primarily as a result of the issue of a partnership consultation document in May this year, and we expect to receive a final version of that around about the time of the autumn statement, which is on 4th December (2013).

There is an attack on service companies where many of our professional practices clients have a service company running alongside, and also the government have asked the office of tax to review ways of simplifying taxation of partnerships, so a lot of changes.

They’re looking to really tackle avoidance of tax, so it comes under the whole ambit of the new guard, the general anti-abuse rule that was effective from July 2013. So in the context of partnerships where there has perhaps been some perceived abuse following the Limited Liability Partnership Act in 2000, so they are looking at ways of preventing sort of the avoidance of tax within those firms.

And one of the main ones being that if you are a member of an LLP it can no longer just be assumed that you are self-employed for tax purposes. And depending on the outcome of the partnership consultation document, this could lead to significantly more revenue for HMRC by the collection of employers’ NI at 13.8%.

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