In the autumn statement chancellor George Osborne revealed that controversial measures to stop employees claiming partnership status to avoid tax, will be implemented in due course.
This year’s Autumn Statement was held on 5th December 2013. The most expected announcement, as a result of the summer consultation, concerned the proposed controversial legislation which affects fixed share members and the taxation of corporate members.
The chancellor declared that he is determined to guarantee that tax advantages of partnerships are not abused. Furthermore, he revealed that changes proposed in the draft National Insurance Bill earlier this year will be applied soon.
The requirements postulated in the new rules are for many members of limited liability partnerships to be obliged to pay higher national insurance contributions by removing an automatic exemption. This is a result of a government announcement in the budget that the government would remove the assumption that LLP members are self-employed rather than employees.
However, the Law Society made a warning that these proposed measures would have serious implications for the legal and business community, and posed a risk to UK’s reputation as an attractive business location.