Payroll costs for service companies for LLP and existing partnerships
In a recent ICAEW Tax faculty conference (as reported in taxation) Paula Tallon put forward a tax planning idea for LLP's where the payroll cost is in excess of £2m.
The partnership forms a service company, and the employees and other relevant services of the business are transferred into it.Which the company then marks up and charges back to the LLP.
Can anyone explain the requirement that the payroll cost be in excess of £2m, as I cannot see why this should not work with smaller entities.
Many thanks in advance.