Professional Services Leaders Oppose Chancellor Reeves' Proposed LLP National Insurance Tax
A coalition of Britain's professional services leaders has issued a joint warning to Chancellor Rachel Reeves regarding proposed plans to tax limited liability partnerships (LLPs) through employers' national insurance contributions (NIC). The letter, signed by prominent figures including The Law Society president, the ICAEW CEO, and leaders from TheCityUK, BVCA, City of London Law Society, and City of London Corporation, cautions that raising LLP NIC would harm UK growth and stifle investment, hiring, and innovation.
The group expressed concerns that the tax increase could force firms to alter their corporate structures, resulting in instability and uncertainty across the economy. They also argued that an increase in LLP taxes could lead to the UK losing talent and capital to global competitors. The letter emphasizes that a higher LLP tax would undermine the government’s stated goal of supporting professional services as a key growth partner.
This letter was sent less than two weeks before the upcoming Budget, with the Treasury declining to comment on the prospective policy. The Financial Times reported that following warnings from the sector, the planned LLP tax might be less severe than initially feared.
