You are here

HMRC’s LLP tax consultation ‘a waste of time’

Future consultations may not be worth 'such time and effort', says CLLS 

12 February 2014

Add comment

By Manju Manglani, Editor (@ManjuManglani)

The City of London Law Society (CLLS) has accused HMRC of ignoring responses to its consultation on tax changes to limited liability partnerships (LLPs).

The CLLS takes particular issue with the 'salaried members' legislation in the draft Finance Bill 2014, which it says is "confused" and creates uncertainty for law firms.

"We believe that the tests are poorly drafted, leading to unsatisfactory (over-) reliance on (entirely non-binding) HMRC guidance," the CLLS' revenue law committee said in a letter to HMRC over the proposed changes.

"The guidance contained in the technical note is confused in a number of different areas, and needs to be dramatically improved."

The letter, which was signed by the committee's chair, Bradley Phillips, continued: "Given the time and effort spent engaging with HMRC during the consultation process, it is particularly disappointing to find ourselves in this position at this time (less than four months before the majority of the new rules are intended to take effect), and calls into question whether it is worthwhile devoting such time and effort to future consultations".

The committee said that the rules, which come into effect on 6 April 2014, give potentially affected businesses "insufficient time to prepare".

Revised legislation and guidance, which are due to be published on 17 February, are expected to provide greater clarity. But, the committee said that businesses would have only six weeks to consider the rules and restructure if needed.

"This assumes that the rules are not changed during their passage through Parliament," the letter said.

"We therefore believe that the rules should be deferred until 06 April 2015, which will give HMRC time to work with taxpayers to produce a more coherent set of rules and guidance, and, more particularly, will give taxpayers time to properly consider how the rules will affect them and to act accordingly."

Fifteen firms are represented on the CLLS' revenue law committee, including all of the magic circle and several US law firms.

 

 

 

Categorised in:

Finance