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In the USA there have been calls for greater conformity between the rules producing tax accounts and those used for financial reporting purposes. A number of benefits are claimed for this so-called ‘book-tax conformity’, including reduced compliance costs and better opportunities for monitoring. In Europe, the debate around use of the financial accounts for tax purposes has arisen from a different conceptual starting point as well as differences in surrounding circumstances. Linkage between tax and financial accounts is common in Europe, although it takes varying forms. This does not result in complete book-tax conformity, however, and recent developments in accounting may be increasing divergence rather than reducing it. Despite the strong arguments in favour of conformity, there are also good reasons for some divergences, meaning that the most likely outcome in any system, whatever the starting point, is partial convergence. The problem with a hybrid outcome of this kind is that, at the point of divergence, there can be conceptual confusion and difficulties in integrating and managing two conceptually very different rule systems. Clarity of the relationship between the rules and improved accounting disclosure requirements might be more important than convergence, and might be achieved with less distortion to either tax or financial accounting. The current UK position is used to illustrate these points.

Current enthusiasm for the ‘enterprise culture’ results in strong support for easy access to limited liability forms of business organisation. This has manifested itself in the creation of new limited liability vehicles such as the LLC and the LLP. The UK Company Law Review is examining ways of enhancing the attractiveness of the limited liability company to small business owners. This article examines the claims made for the ‘efficiency’ of limited liability and the applicability of these claims to small firms. It raises the importance of taking into account public policy issues beyond economic efficiency when considering the degree of risk taking and shifting to be encouraged. The article concludes that, although it is difficult to find rational methods of restricting access to limited liability, it does not follow that limited liability should be positively encouraged for all small firms. It is important to signal the limitations of limited liability.

The schedular system of income tax in the UK frequently comes under attack, not least in relation to the distinctions it draws between the tax treatment of the employed and the self-employed. However, on examination, it appears that non- schedular systems of taxation share both these distinctions and the difficulties that arise from them, albeit to varying degrees. The division between employed and self-employed is also problematic for social security systems. These difficulties are found, to a greater or lesser extent, in all the jurisdictions studied by the authors. It may be argued that all or some of the tax and social security differences are justified by fundamental economic and legal differences between the nature of employment and selfemployment relationships. This may be true where the relationships compared are unambiguously, on the one hand, employment and, on the other, self-employment. However, there have always been non-standard relationships that combine characteristics of both these broad categories. This grey area appears to be increasing with changing work patterns. Consequently, the simple dichotomous system adopted by the UK tax and social security systems has come under pressure. This article considers the problems arising from this situation and some of the ideas that have been put forward to deal with them.