Budget 2014 - Partnership review

[aponting389]

Hi, i'll try and make this brief... my girlfriend runs franchise of a theatre school, shes had a very vague email from their head office about changes introduced in the recent budget which could affect her exemption from VAT. the only thing I can find in the budget which they could be referring to is the "partnership review". (the franchise runs as a partnership with her teachers owning a small percentage each.) which is "to counter the disguising of employment relationships in limited liability partnerships"

so my question is...

does the partnership review apply to limited liability partnerships only or also ordinary business partnerships (which hers is)?

I am asking because the Head Office would know that none of the franchises are run as LLPs, so why would they send this vague email. I haven't heard back from my accountant yet so thought i would enquire here too!


thanks very much

[wattsm666]

Speak to an accountant.

Vat is nothing to do with the partnership review, that is about income tax and nic.

[wattsm666]

Speak to an accountant.

Vat is nothing to do with the partnership review, that is about income tax and nic.

[wattsm666]

Speak to an accountant.

Vat is nothing to do with the partnership review, that is about income tax and nic.

[Eric Mc]

HMRC are reviewing the way partners in LLPs (limited liability partnerships) receive their income - especially if they are partners who have not injected any capital into the partnership.

As far as I am ware, the review (as mentioned) is more of an Income Tax and National Insurance issue rather than a VAT issue.

[aponting389]

OK thanks, I have now learnt that it definitely only applies to LLPs. The reason it will affect our VAT exemption is, IIRC is something to do with subjects that are ordinarily taught in schools being exempt from VAT under the private tuition exemption, but not when taught by employees.