Solicitors hit by new tax clamp down

29th April 2014

Solicitors in the Sheffield region are being warned that they may have to make changes in the way they operate as the Government looks to tackle 'disguised employment' in limited liability partnerships (LLPs).

New rules being brought in by HM Revenue and Customs (HMRC) mean that those working in LLPs, which are particularly prevalent in the legal profession, will lose their self-employed status and be treated as employees unless they can satisfy certain conditions. Simon Bladen, a partner specialising in the legal sector with Sheffield-based independent chartered accountants and specialist business advisers Hawsons, of Glossop Road, said: -There has always been a default legal presumption that individual members of LLPs are self employed for both income tax and National Insurance purposes but HMRC are set to remove this assumption. Their concern is that some members are, in reality, employees and as a result the LLP is avoiding not only employers' national insurance charges but also PAYE obligations. -HMRC say there is increasing evidence that LLPs are increasingly being used and marketed as ways to avoid employment taxes and they are determined to tighten up the rules. Simon says that in future individual members will be classed as employees, and not self-employed, if they receive at least 80 per cent of their remuneration through fixed salary payments, do not have significant influence over the partnership and whose contribution to the LLP is less than 25 per cent of their salary payment. Traditional partnerships are not affected by the new tax rules. For more details on how the new tax arrangement will work, contact Simon at:slb@hawsons.co.uk. Tel: 0114 266 7141.

You might also be interested in

Landmark skills training report calls for wide-ranging reboot of UK system

Thu 6th May 2021

A major new report is calling for a root and branch reform of the UK’s training system to help businesses access the skills they need to boost productivity.

Sheffield Chamber Comments on Sheffield City Region Quarterly Economic Review Q1 2021 Results

Thu 6th May 2021

On 27th April 2021 businesses from across the region gathered to hear the latest results following the Sheffield City Region (SCR) Quarterly Economic Review for Q1.

BCC welcomes ratification of UK-EU TCA but says work remains to be done

Thu 29th April 2021

Speaking after news that the Trade and Co-operation Agreeement has been ratified, Hannah Essex, Co-Executive Director of the BCC, said:

New Figures Show Workforce Growth Expected but Some Sectors Yet to See Signs of Revival

Thu 29th April 2021

The British Chambers of Commerce today released its Quarterly Recruitment Outlook for Q1 2021.