Overview
- Reuters reports legal industry bodies criticized the unconfirmed proposal, saying it would hinder growth and alter how professional partnerships operate.
- The Times first reported that Chancellor Rachel Reeves is considering applying an employer-style national insurance charge to people in LLPs or partnerships.
- Think tank CenTax estimates about 190,000 to 200,000 partners, largely in law, accountancy and general practice, would be affected with receipts near £1.9bn.
- CenTax modelling suggests a typical solicitor drawing £316,000 could face about £23,000 more tax with a notable rise in effective and marginal rates.
- Tax experts warn of administrative complexity and potential restructurings such as incorporation or partners becoming consultants, and Dan Neidle cautions that excluding general partnerships would create unfairness and invite avoidance.