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Partnership rules will harm genuine LLPs, peers told

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Gary Richards, chair of the Law Society’s tax law committee, has told the Finance Bill Sub-committee of the House of Lords that the proposed partnership measures (due to come into effect in April) will harm professional firms that operate as LLPs for genuine business reasons. Richards accused HMRC of ‘persistently describing the tax consequences of the current rules as avoidance in an attempt to justify changes that go further than are needed to counteract perceived national insurance benefits’.

The Law Society has also submitted written evidence, declaring that the new approach would create an inconsistency between UK and foreign LLPs which would put UK LLPs at a disadvantage.