The draft Bill was published on 17 July and includes draft legislation in respect of specific points raised at Budget 2013.
"One of the more interesting and controversial points relates to members of a Limited Liability Partnership," explains Inez Anderson, partner, employment tax and incentives, at Smith & Williamson, the accountancy and investment management group.
"At the Budget it was announced that the Government planned to consult on removing the 'presumption' of self-employed status which is applied to members of an LLP. That consultation process is ongoing but this Bill as drafted removes the automatic exemption from employment status for national insurance purposes. If enacted as drafted that will mean that from 6 April 2014 it will be necessary to consider each individual member of an LLP separately to determine if they are employed or self-employed for national insurance purposes."
"If employed this will result in employer contributions being due by the LLP. This will leave LLPs with some key decisions, for example, will the employers' NIC be allocated to the affected members reducing only their profit shares or will the profit shares of all members be reallocated after taking this additional expense into account?"
"There are of course many other tax and legal aspects which will need to be considered once the outcome of the consultation process is known."
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