New OTS report on partnerships published
The Office of Tax Simplification (OTS) was established in 2010 to provide advice to the Chancellor on simplifying the UK tax system – the objective, to reduce compliance burdens on both businesses and individual taxpayers.
A new interim report published on 22 January 2014 concerned a review of partnerships by the OTS. Partnerships account for approximately 10% of all UK businesses but the report found that most of these were small businesses with 55% of partnerships having a turnover of less than £75,000 and a further 41% having a turnover between £75,000 and £1 million.
In the report, the OTS recommended a number of quick fixes (aimed mainly at small partnerships) including publishing a manual of consolidated guidance for partnerships, changing the Corporation Tax Self Assessment return to include a section for income from a partnership, the creation of free software by HMRC for the smallest partnerships, and HMRC to give clear guidance on VAT grouping for LLPs.
The report also set out a number of longer-term issues divided into medium-term recommendations and long-term areas to investigate. The report also looked at the scope for improvements in the digital filing area such as simpler ways for partnerships to file.
The OTS can only make recommendations and it is expected that the Chancellor will give a formal response to the report in his 2014 Budget.