The New Year has kicked off with major headaches for finance teams across the UK, as they start in earnest to wrestle with HMRC’s national insurance contributions (NIC)-related early Christmas present.
In case you missed it, late last year HMRC unveiled its proposals for changes to the partnership tax regime, a move aimed at dealing with the so-called ‘disguised salary’ of fixed-share LLP members and clamping down on what it views as tax avoidance measures used – legally – by LLPs.
The changes it is suggesting have the power to make most, if not every, LLP examine its profit-sharing arrangements and, in theory at least, completely restructure them. Oh, and they have three months to do it. Nice.
The first two firms to confirm that they are reviewing the way they define fixed-share partners as a result of HMRC’s proposed changes are DWF and Weightmans.
One thing is for sure – they won’t be the last.
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