US law firms with a base in the UK are able to enjoy some potential financial advantages – but only if the firm is structured properly. Currency fluctuations and differences in accounting methods represent major pitfalls for the unwary. In addition, firms need to be prepared for the growing scrutiny from tax authorities on both sides of the pond.
Right now, payment of the 31 January tax bill is likely to be front of mind for partners. This can be challenging for many, but members of a US firm can face additional personal cash flow pressures since they are typically paid gross (as opposed to net of income tax and national insurance contributions).
