UK firms consider ways to mitigate increased income tax

A number of UK law firms are considering setting up subsidiary service companies or introducing new ownership structures in order to avoid the maximum 50 per cent individual income tax rate. London accountants report that there has been an increase in demand from law firms looking to establish service companies alongside their main business in order bypass the maximum 50 per cent individual income tax rate in favour of a 28 per cent corporate tax rate. Research by accountant firm Smith & Williamson reported that 32% of respondents have completed or are in the process of setting up a service company, while 33% are considering it. Simmons & Simmons managing partner Mark Dawkins commented: "As a firm we have stayed rather conservative when it comes to tax structures. Previously the hassle was not worth the benefits, but the 50% tax rate means that we have to look at our options."

UK firms consider ways to mitigate increased income tax legalweek.com Thu, Oct 14, 2010