Law Soc calls for tax exemption for smaller firms
The Law Society has urged HM Revenue & Customs (HMRC) to consider suspending the practice of taxing law firms before they have been paid for their services for the remainder of the recession. Law Society president Paul Marsh has written to HMRC outlining the argument that small firms with an annual turnover of less than £2m should be exempt from so-called UITF 40 taxes to assist in their financial survive during the downturn.The UITF 40 regime taxes businesses on work in progress, which for many legal practices means they are being taxed on work they have not yet received payment for.A second option put forward by Marsh is that smaller firms could be given the option to "opt out" and return to a cash-based accounting system.
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