It has been confirmed that the implementation of the LLP/partnership tax changes will take effect from 6 April 2014 and will counter two main areas:
- The disguising of employment status in relation to salaried members of LLPs; and
- Tax-motivated profit/loss allocations between partners to secure a tax advantage.
If an individual is caught by the Salaried Member legislation, PAYE including payment of employer NIC must be operated from 6 April 2014.
The annual investment allowance (AIA) is to increase from £250,000 to £500,000 for the period from 6 April 2014 to 31 December 2015. It should be remembered that LLPs or partnerships with a corporate member are prohibited from claiming AIA.
The Chancellor confirmed that from 2016 onwards Class 2 NIC will be brought into the self-assessment regime, to be collected alongside income tax and Class 4 NIC.
For the full 2014 Budget Summary please click this link BWM 2014 Budget Report