The Law Society has added its voice to concerns about the pace and extent of the government's plans to clamp down on the misuse of LLP membership status to avoid tax.
Following an announcement in the chancellor’s autumn statement, a draft finance bill published this month sets out proposals for identifying members of LLPs who will be regarded as ‘salaried members’ from 6 April 2014, to be treated as employees for tax purposes.
Gary Richards, chair of the Society’s tax law committee, described the plan as 'extremely concerning'.
He said the the proposals from HM Revenue & Customs 'do not take account of the variety in which partners operating via LLPs conduct their businesses and could pose very practical difficulties, both for firms and HMRC.
'To confound the matter, the proposed start date of 6 April 2014 is an unfeasibly tight deadline to adhere to and we will be urging a deferral while these revised proposals are reviewed. The tax committee plans to meet HMRC in the New Year to raise our members’ concerns.'
The draft legislation is open for technical consultation until 4 February.