The government has dashed hopes that all professional practices will be given more time to pay a one-off tax hit caused by changes to accounting rules.

Paymaster-General Dawn Primarolo confirmed last month that the spreading relief announced by the Chancellor of the Exchequer Gordon Brown in his Pre-Budget Report last December will only be made available to firms that adopted the new policy on or after 22 June 2005.


A significant number of law firms adopted the changes brought about by accounting statement UITF Abstract 40 - which accelerates the way they account for revenue and work in progress - ahead of that date.


Ms Primarolo rejected claims that firms that adopted the changes early were being unfairly penalised.


In a letter to the Law Society and the Consultative Committee of Accountancy Bodies, she said: 'They, or their agents, will have selected what they considered to be the appropriate accounting policy taking into account the implications of that decision. We are not now bringing in any additional charge on them which they could not have anticipated when they made that decision.


'Instead, we are providing a relief for those who are unequivocally required to change their accounting policy in ways which they may not have anticipated until the position was confirmed by UITF Abstract 40.'


Law Society President Kevin Martin said: 'We are very disappointed that the government has not changed its position. This is an irrational approach which will penalise those businesses which followed advice to adopt best practice as soon as possible.'


The Society said it will continue to lobby on the issue.