The use of service companies by limited liability partnerships (LLPs) could be outlawed in the UK Government’s latest clampdown on tax avoidance.

Danny Alexander, chief secretary to the treasury, confirmed the move at the Liberal Democrats’ annual conference this week, saying: “We will be closing the loophole that allows partners in partnerships to structure their staff arrangements so that they avoid the correct amount of income tax. It’s wrong, it’s unfair, and it’s got to stop.”