- My LS
Timely payment call for evidence – Law Society response
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 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.
The call for evidence closed on 13 July.
We expect the government to publish a response document in due course.