CIOTs views on the plans to impose ban on LLP corporate members

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The government in the UK has recently come to the decision that there is currently not a strong case for action to prohibit corporate members of limited liability partnerships and calls for a more targeted approach to the issue if any minority companies abuse their use.
The government in the UK has recently come to the decision that there is currently not a strong case for action to prohibit corporate members of limited liability partnerships and calls for a more targeted approach to the issue if any minority companies abuse their use. This announcement has been welcomed by CIOT (the Charted Institute of Taxation).

This report arrives shortly after the tax body criticised initial government plans to ban corporate members of limited liability partnerships (LLPs) outlined in a consultation supplied by the Department for Business, Innovation and Skills (BIS) consultation on the scope of exceptions to the prohibition of Corporate Directors in LLPs.

In its response to the consultation, CIOT states that it does not agree that the government should review the issues where parallels are drawn between to corporate members of LLPs and the review of the Small Business Enterprise & Employment Bill provisions, given that these are separate issues and should be considered subjectively.

It goes on to suggest that it would be preferable to give an indication that future policy would not withdraw general use of LLPs by companies, but would consider a targeted approach if misuse by a minority arises. The consultation ran from 27th of November 2014 to 8th of January 2015, and polled views on circumstances where the use of Corporate Directors of UK companies should be allowed.