UK: Changes to the taxation of partnerships?
03 March 2015
Posted by: Author: Chartered Accountants Ireland
Author: Chartered Accountants Ireland
The Office of Tax Simplification (OTS) has published its final report on their review of the taxation of partnerships.
Work in recent months has been focused on the topics the OTS identified in its July report, ranging from education for small partnerships through a potential recast of HMRC’s Statement of Practice D12 to identifying specific international issues that need to be tackled.
The report makes 14 further recommendations which include requesting clear and comprehensive guidance for new partnerships, allowing partners to claim their own expenses, simpler HMRC administration for international partnerships, and extending gift aid to partnerships. These latest recommendations come ahead of the Budget on 18 March; it will be interesting to see how the Government chooses to take this forward.
The report also stresses a number of very positive points about the importance and value of partnerships, including how they are a "useful additional device to attract investors in business, both property and generally” and acknowledges that progress has been made with HMRC on certain areas.
Overall the report shows that there are several areas of uncertainties in dealing with taxation of partnerships which the OTS has been unable to agree with HMRC or propose solutions that HMRC are comfortable with. The OTS notes that "Although this report is badged as our Final Report on Partnerships, it may be appropriate for [us] to do short follow-up reports, probably in conjunction with HMRC, as our recommendations are progressed.”
This article first appeared on charteredaccountants.ie.