UK law firms could be hit by new tax rules

By Neasa MacErlean

13 December 2013 at 09:14 BST

Law firms could be disadvantaged by provisions which take effect in April to clamp down on payments made to partners which could be seen as the 'disguised salary' of employees.

Employee or partner?

Tax and accountancy advisers Baker Tilly say: 'We fear that innocent arrangements will be caught….This now gives the partnership model a very real disadvantage in comparison to the traditional corporate model.' The disguised salary rules will take effect if, for instance, the individual involved receives a fixed pay or a variable pay which is set without reference to the profits or losses of the partnership. Other new rules relate to different issues affecting partnerships where one or more members is a company. Source: Baker Tilly


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