Burges Salmon sets up low-tax vehicle for staff

Burges Salmon is set to transfer its entire non-­partner staff base to a newly ­created service company in an effort to cut its tax bill.

The new company, Burges Salmon Limited, will be wholly owned by Burges Salmon partners and fully indemnified by the LLP.
The Bristol firm launched a consultation process with staff earlier this year, ahead of the transfer of operations from the beginning of the tax year on 1 May.

Finance partner Paul Browne spearheaded the initiative working alongside managing partner Peter Morris.

Around a third of the UK’s top 100 law firms are understood to have adopted similar structures, including four of the five firms that Burges Salmon uses as ­comparators. These include Eversheds, Osborne Clarke and Wragge & Co.

Browne said the tax ­savings would add up to “thousands, not millions”, adding that there would be no job losses or changes to employee conditions as a result of the change.

He continued: “Some ­people have asked if this is the first step to outsourcing, which it isn’t. If we wanted to outsource we would ­outsource, but it’s not the Burges Salmon way.”

As part of a transfer pricing mechanism the service company is able to charge a 3-4 per cent premium on the costs of the employees, which is tax-deductable.