Law Society Tax Law Committee responds to Budget

In response to yesterday’s Budget, Gary Richards, chair of the Law Society Tax Law Committee, said: “The Law Society is disappointed that the Government is insistent on enforcing the changes to LLP salaried member tax rules from 6 April 2014, despite the House of Lords’ report last week which mirrored our own concerns with the proposal and called for any changes to be delayed until next year. There is no evidence that these changes will generate substantial revenue – nor has any explanation been given as to why it is acceptable to place UK LLPs at a disadvantage in comparison to non-UK LLPs or general partnerships, neither of which will be subjected to these new rules.
“The Law Society is concerned by plans to grant HMRC much greater powers to collect taxes “up front” from taxpayers whose cases are under dispute. This would operate where HMRC – not the judiciary – believes their cases sufficiently resemble other taxpayers’ cases resolved in HMRC’s favour. We have previously informed HMRC that we feel these changes in effect threaten taxpayers’ right of appeal, as HMRC could impose penalties if a taxpayer served with such a notice lost his appeal. These changes would come into effect from the date of Royal Assent, and would even be applied to long-standing pre-existing tax disputes.
“We are encouraged by the government’s announcement of plans to increase pension flexibility though much will depend on the detail of the legislation.
“We look forward to being able to contribute to the long-awaited consultation document on the collection of Capital Gains Tax from non-residents disposing of UK property from 2015.”
20 March 2014

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