HM Revenue & Customs has given solicitors a week to pay the tax they owe on undeclared income or “face hefty penalties” of 100% on the unpaid tax and the risk of a criminal investigation.
A High Court judge has found that although international law firm Baker & McKenzie was negligent in advice it gave on Mexican tax law, it was not liable to pay damages to the company involved.
Tax barristers who have evidence of colleagues breaking the rules should report it to the Bar Standards Board (BSB), chief executive Dr Vanessa Davies has said.
Smaller law firms are struggling to retain their junior partners in advance of tough new capital requirements set out by HM Revenue & Customs in its crackdown on fixed-share partners avoiding PAYE tax, an executive search firm has claimed.
The full distribution remuneration model is on the way out because law firms want to stockpile funds within the business, according to a survey. It is being phased out in favour of a more ‘corporate’ approach to bolster firms’ finances.
HMRC claimed yesterday that a “significant minority” of lawyers in London are underpaying on tax as it launched a specialist taskforce aimed at rooting them out. However, the announcement met with polarised reactions suggesting that it is either likely to lead to criminal actions or is doomed.
Alternative business structures and tax liabilities mean that over 2,000 law firms are at risk of failure in the next 12 months, according to the Association of Business Recovery Professionals, better known as R3.
Conveyancers will soon be responsible for making commercial clients aware of capital allowances reports and should be careful not to be caught out or risk a negligence action, a tax expert has warned.
Solicitors’ firms put off becoming limited companies by the complexity of conversion from partnerships are missing out on “very substantial” tax savings, according to one former firm that incorporated successfully three years ago.