Treasury takes aim at murky hedge funds in £3bn tax avoidance crackdown
The billionaire partners of Mayfair’s shadowy hedge funds are to see their taxes rise by more than £3bn over the next six years under a clampdown on avoidance measures.
Hedge funds are generally structured as limited liability partnerships, with the fund managers treated as self-employed. The arrangement means some of the most profitable business in the country pay no employers’ national insurance, allowing them to make even more money.
Fund managers in LLPs are also allowed to defer paying their income tax to the end of the financial year, allowing them to earn interest before handing it over to the Treasury.
While details will not emerge until next week’s Draft Finance Bill, these salaried partner structures are likely to be banned.
Aidan Sutton, tax adviser at PWC said: “The devil is in the detail on this one. But the huge amount the Treasury is trying to raise clearly indicates they are going to make some swingeing changes. But they need to watch out for collateral damage: many of these arrangements are totally bona fide.”
The move will not only strike out many hedge funds’ arrangements. Although the Treasury press release specifically referred to “alternative investment funds”, it will also capture a range of other industries where the tax avoidance technique is used, from fruit picking to seemingly respectable law firms in which huge numbers of employees are made salaried partners.
- 1 Stephen Fry explains what he would say if he was 'confronted by God'
- 2 Venezuela Expo Tattoo 2015: Extreme body art from 'Vampire Woman' to 109mm earlobes
- 3 Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
- 4 Ball pool for adults opens in London
- 5 Rashida Jones speaks out against male-centric porn saying 'women should have sex and feel good about it'
Stephen Fry explains what he would say if he was 'confronted by God'
9 reasons Greece's experiment with the radical left is doomed to failure
Have we reached 'peak food'? Shortages loom as global production rates slow
British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia
Liberal Democrat minister defends comments suggesting immigration causes pub closures
Hard line on immigration could cost Tories the election
iJobs Money & Business
£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...
£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...
£13000 per annum: Recruitment Genius: This Pension Specialist was established ...
£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...