We now have further guidance and draft legislation from HMRC as to how LLPs will be taxed. With just over a month before the 6 April 2014 implementation date there are some steps you need to take now to comply with the new rules.
What do I need to do now?
- Consider the characteristics of members and determine whether changes are required to documentation and practices to ensure they maintain their self-employed status and do not become salaried members subject to PAYE and NIC;
- Where it is accepted that they will be salaried members, ensure systems are put in place to correctly account to HMRC for taxes due by 6 April 2014 including PAYE, NIC and benefits in kind charges;
- If there are non-individual members within your LLP, consider the ability to retain working capital and defer compensation within your existing structure and whether or not restructuring is necessary;
- Investigate whether you are required to defer or consider it desirable and consider methods of achieving this within the new regime for LLPs.