John Manis suggests a simpler solution to deal with ‘disguised employment’ than the one set out in the partnership tax consultation
The consultation on partnership taxation includes proposals for new legislation to deal with ‘disguised employment’ using LLPs. There is a simpler way.
The problem identified by HMRC in its consultation document A review of two aspects of the tax rules on partnerships is that the tax legislation (e.g. ITTOIA 2005 s 863) wrongly provides for all LLP members to be taxed as if they were partners – including junior members who if the LLP were a partnership would not be partners at all. The original policy aim was to tax LLP members in the same way as partners in a partnership not more favourably.
If the problem is that a legislative...
