More NewsLLPs risk inflated pension levy costs

LLPs risk inflated pension levy costs

LLPs mistaken for start ups risk exaggerated levy costs

Newly created limited liability partnerships risk paying larger than
necessary pension levies because they could be mistakenly assessed as beiing
start up businesses, according to Grant Thornton.

The firm said the mistake could be made if risk assessors see there is only
one year’s accounts at Companies House, potentially leading to the conclusion
that the partnership has only been in business for a very short time.

Under the new Pension Protection Fund regime businesses with defined benefit 
schemes have to pay a levy from April 2006 to build up the fund’s reserves.

the levy forms a new cash cost and is based on a financial risk assessment.

Roger Zair, head of professional partnerships at GT said: ‘The financial risk
assessment may be incorrectly based  on the business being a new start up
because of a recent conversion to LLP status from partnership with only one
year’s accounts having been filed at Companies House.

‘If the facts of its financial history are properly explained to the risk
assessor, the firm may be able to achieve a considerable saving in the levy.’

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