Since their introduction in 2000, limited liability partnerships (LLPs) have been an increasingly popular structure through which to operate a UK business due to the flexibility it affords its members. However, the combination of the new partnership taxation rules that came into force from 6 April 2014, and the reduced rate of corporation tax, will tip the balance back in favor of a more traditional corporate structure for some businesses.
The changes in the UK partnership tax rules will have a particular impact on LLPs whose partners are reclassified as salaried members, or those LLPs which will be restricted as a result of the mixed membership rules. There is no ‘one size fits all’ answer and much depends on where the business sits in its life cycle and the plans for the future.
How Duff & Phelps can help
Duff & Phelps has a large team of professionals that can draw upon their tax, accounting and regulatory experience in helping businesses decide whether an LLP or a Ltd company structure best suits their needs. We can help clients make informed decisions through modelling financial performance using scenario analysis and practical experience of implementing remuneration structures that maximise returns for stakeholders. Our services extend from assisting start-up businesses to design their optimum structure, to restructuring long-established businesses from an LLP to a Ltd, or vice versa.
Our offering can be tailored for the specific needs and objectives of each client to create bespoke solutions; specifically these can include:
- Project managing implementation through the sometimes opposing commercial, tax and accounting challenges whilst liaising directly with regulators to deliver on desired timescales;
- Modelling effective tax rates and designing suitable remuneration strategies that comply with increasingly complex tax and regulatory regimes;
- Advising on the recognition and valuation of any goodwill that may crystallise on restructuring, and the tax treatment thereon;
- Evaluation and claiming of specific tax reliefs including rollover, gift, entrepreneurs’, VAT TOGC, EIS, SEIS and business investment relief.