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HMRC have opened an aspect enquiry into the partnership return of one of our solicitor clients. One of the issues they have raised is a recruitment fee of approximately £50 000 which was payable to a recruitment consultant for recruiting a new partner to the firm. The partnership is relatively substantial and has over 50 partners.
HMRC are arguing that the recruitment of a partner resulted in a change in the make-up of the partnership (i.e. in the structure of the business) and therefore the recruitment costs are capital and are not allowable. This appears rather tenuous to us and we would be grateful for any suggestions or similar experience that readers may have.
Query T17 127 — Lawyer.
Reply by Thicket:
This is the type of query where the tax adviser would like to be able to come up with a knock-out blow and destroy HMRC's argument! Taxpayer...
Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.
