Finance

HM Revenue & Customs (HMRC) has warned that having a complex tax avoidance scheme approved by a senior lawyer does not render it safe after a specialist tax QC who designed his own scheme saw it struck down.

HMRC is set to scrutinise the status of law firm partners after measures announced in the Budget. The Treasury is to consult on removing the presumption of self-employment for LLP partners and on countering the “artificial allocation of profits to partners”.

The full distribution remuneration model is on the way out because law firms want to stockpile funds within the business, according to a survey. It is being phased out in favour of a more ‘corporate’ approach to bolster firms’ finances.

Profits per equity partner at the most successful small and medium-sized firms were more than 40 times those of the bottom-earning firms last year, a major study by NatWest has revealed. “It could be observed that the average firm was making virtually no real profit,” it also reported.

Many small and medium-sized law practices expect alternative business structures to affect them directly, with a third saying they could merge with another firm and one in five likely to seek external funding and/or bring in non-lawyer owners, a survey has found.

Law firms are not maximising the potential in either their clients or their staff, according to new benchmarking research seen by Legal Futures. Firms reported very different results from cross-selling, for example,

Barristers will soon be able to offer a full range of legal services after the Bar Council unveiled a third-party escrow account which will hold client money. All funds are to be held in a ring-fenced account with Barclays.

HMRC claimed yesterday that a “significant minority” of lawyers in London are underpaying on tax as it launched a specialist taskforce aimed at rooting them out. However, the announcement met with polarised reactions suggesting that it is either likely to lead to criminal actions or is doomed.

All law firms judged to present a risk of financial instability are to be contacted by the Solicitors Regulation Authority by the end of this month, Legal Futures can reveal. However, it is urging firms facing financial difficulty to overcome their mistrust and contact them early.

Our regular round-up of news you may have missed includes an international online directory, Scotland looking for a piece of the LPO market, worsening cash-flow at law firms, a free probate offer, and much more besides.