Summary
Chancellor Rachel Reeves is considering a tax change that could lead to higher taxes for some lawyers, accountants, and doctors who use limited liability partnerships (LLPs). This change could be included in the upcoming Budget to help meet economic goals. Reeves aims to have wealthier individuals pay more taxes to address financial challenges.
Key Facts
- Reeves is thinking about implementing a new tax for those using LLPs, impacting professions like lawyers, accountants, and doctors.
- LLPs currently enable these professionals to be treated as self-employed, avoiding employer National Insurance contributions.
- The proposed tax is expected to be a little less than the 15% employers' National Insurance rate.
- Tax experts suggest that extending employer National Insurance to partnerships could make the tax system fairer.
- The British Medical Association warns that these changes could make private healthcare less affordable and affect small doctor-led practices.
- The CenTax think tank estimates that extending employer National Insurance to all partnerships could raise around £2 billion yearly.
- Some experts believe that restructuring by those affected could lead to a smaller revenue increase.
- Reeves might need to find around £20 billion through tax hikes or spending cuts to meet her fiscal rules.
