The slow-burn impact of HMRC’s looming changes to partnership tax are starting to be felt. Not yet in anyone’s pocket – you’ll have to wait until 6 April for that – but in the growing number of firms that have launched consultations with their salaried members.
You’ll recall we first covered this story in December, suggesting that ranks of salaried partners would soon be heading to the bank to borrow potentially tens of thousands of pounds to cover new capital injections and consequently circumvent the Revenue’s employee status test. Well, things have moved on. This month the first crop of firms including DWF, Weightmans, DAC Beachcroft and Trowers & Hamlins shed some light on the approach they will be taking to the new legislation.
And next Monday’s cover story in the print edition of The Lawyer will examine this issue in detail. Along with a range of views from bankers, barristers and numerous accountants the feature will include a handy cut-out-and-keep guide to how much – in theory at least – firms could be in line for as an unlooked for windfall. It will also include a warning about some of the rather nasty “bear traps” that could be lying in wait for firms that think they’ve got this problem sorted. Required reading for any partner at an LLP.
Meanwhile for other partners the days of worrying about such mundane matters as whether or not to inject capital are all but over. For those, or for anyone approaching that stage, check out the article by Andrew Flannagan, managing partner at Attwaters Jameson Hill, on how a merger or sale can provide an exit strategy for ageing partners with no succession in place and who can’t afford to close the doors because of the cost of run off insurance LINK.
And staying with partners and all things careers related, don’t miss Baker Tilly’s Rowan Williams on why lateral hires may be a risk worth taking now and again.
It could happen to you.