Tax raid on UK partnerships to be less aggressive than feared
The Treasury has reassured senior City figures that its mooted tax raid on partnerships will be less aggressive than feared in an effort to calm nerves in the accountancy and legal sectors ahead of the Budget.
Chancellor Rachel Reeves has ruled out imposing full employer national insurance contributions on limited liability partnerships (LLPs) but is mulling introducing a lower rate instead, according to government officials.
Lawyers and accountants have been lobbying hard against the idea of paying NICs on partner profits, which could affect about 200,000 people and raise £1.9bn a year if applied at the usual rate of 15 per cent.
The Financial Times notes that the CLLS is expressing concerns over the potential changes, stating that “while the legal profession recognises the importance of a fair and effective tax system . . . [it] could have unintended consequences for one of the UK’s most globally competitive and economically valuable sectors”.