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Timely payment call for evidence – Law Society response

The proposals

We responded to an HMRC consultation seeking views on opportunities and challenges of in-year calculation and payment for income tax self-assessment and corporation tax for small companies

This consultation asks for views on a broadly defined proposal to increase the frequency and accelerate the timing of calculation and payment of:

  • income tax (outside of the existing regular payment regimes such as PAYE)
  • corporation tax for smaller companies

Our view

Our response focuses only on highlighting and explaining some expected impacts of such a proposal on partnerships and LLPs in income tax self-assessment.

Such impacts would include potential cash flow consequences and additional compliance and complexity arising from issues such as

  • allocation of profits and charges
  • calculation of double tax relief and other allowances and reliefs

What this means for solicitors

We focus on the consultation question about partnerships because:

  • many law firms, including the majority of the largest firms, are constituted as LLPs and partnerships
  • this is an area that raises specific and complex issues that may otherwise be less visible to policymakers

We hope that the potential impacts of the proposals on law firm partnerships and LLPs will be better understood and taken into account in any further policy developments in this area.

Next steps

The call for evidence closed on 13 July.

We expect the government to publish a response document in due course.

Read the call for evidence on the GOV.UK website

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