Revenue slammed over LLPs
A leading accountancy firm has claimed that changes being proposed for the Finance Bill 2001 will lead to a two-tier system of Limited Liability Partnerships.
Baker Tilly believes the more favourable tax regime will be offered only to professional firms and anti-avoidance legislation will be introduced to ensure it is not available to others such as property companies, farming, film and finance organisations.
‘The Inland Revenue has woken up to the fact that property investment companies could benefit from the advantageous tax status of LLPs,’ said Baker Tilly partner George Bull.
‘For some reason the Revenue doesn’t want LLP tax relief available to non-professional practices, despite the fact that this legislation could make businesses more competitive with their LLP counterparts in America,’ he added.
‘It would be a mockery of parliamentary procedures if the Revenue uses LLP legislation as an excuse to increase tax burdens through the back door,’ said Bull.
The government decided to review the tax status of LLPs in June to prevent their use for tax avoidance.
Links
LLPs set for fasttrack through parliament for 2001 delivery