Leading firms including Hogan Lovells and Eversheds have joined the ranks of those asking salaried partners to increase their capital contributions in response to HM Revenue & Customs’ (HMRC) crackdown on the taxation of limited liability partnerships (LLPs).
Changes introduced last Sunday (6 April) are designed to clarify the distinction between employees and partners and prevent firms from avoiding national insurance contributions for junior partners who have only small shares in the business. This means that a generation of new and existing salaried or fixed-share partners can be asked to contribute at least 25% of their annual earnings to their firms within three months.
