What does the Autumn Statement have in store for the professional services sector?
Rowan Williams, RSM’s UK head of professional services
Commenting ahead of the Chancellor’s Autumn Statement on 25 November, Rowan Williams, RSM’s UK head of professional services said:
“The Summer Budget announcement that corporation tax rates will fall to 18 per cent by 2020 has increased concerns that the corporate tax regime is becoming more attractive than the partnership regime.
“It will be interesting to see if this trend becomes more pronounced and whether this could ultimately threaten the very nature of partnership.
“We will also be keeping a close eye on any tax announcements that could impact on partners. Currently, fixed share partners have to pass one of three tests to enable them to be taxed as self-employed. Any moves towards raising this bar so that more than one of these tests must be passed could have a detrimental effect on attracting or promoting partners.
“The Chancellor has already indicated that we should not expect any major announcements about the pensions taxation system pending the publication of a Green Paper next year, but the changes to the lifetime allowance and the reduced annual allowance for top rate earners coming in next April will make life more difficult for partners whose pension savings are insufficient.
“This may delay the retirement plans for some more senior partners and make succession planning more problematic.
“Finally, a number of recent high profile cases have highlighted the dangers of cyber-attacks. Professional services firms are not immune and will be required to invest significant sums in order to protect themselves in the future.
“We would support any moves by the Chancellor to provide assistance to firms in the form of enhanced tax allowances on such expenditure to encourage them to invest.”
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