House of Lords recommends delay to LLP tax crackdown

The House of Lords' economic affairs committee has recommended a delay to the government's imminent tax crackdown on limited liability partnerships (LLPs).

In its second report on the draft finance bill, published this week, the committee said the government should give "urgent consideration" to delaying provisions that enforce more stringent taxation of LLPs. The Treasury has argued the LLP model enables managers to reduce tax on salaries and avoid income tax by disguising employees as self-employed partners. Legislation designed to counter these effects is due to come into force on 6 April. But the economic affairs committee said the proposed legislation does not achieve the Treasury's goals in its current format. "We recommend that...