Lawyers Challenge Proposed Tax Increase on LLPs

British lawyers are criticizing finance minister Rachel Reeves' reported proposal to increase taxes on Limited Liability Partnerships (LLPs) used by lawyers, accountants, and doctors to address a budget shortfall. The planned tax change could affect around 200,000 individuals and generate approximately 1.9 billion pounds, potentially hindering economic growth.

British lawyers have expressed strong opposition to Finance Minister Rachel Reeves' alleged plan to hike taxes on Limited Liability Partnerships (LLPs), a structure commonly used by professionals like lawyers, accountants, and family doctors. The proposal is aimed at addressing a projected budget shortfall of up to 30 billion pounds in the upcoming November 26 budget announcement.

Currently, LLP partners are classified as self-employed and are exempt from employer national insurance contributions. A recent report by the Centre for the Analysis of Taxation suggested that altering these rules could impact approximately 200,000 individuals and raise a significant 1.9 billion pounds in additional tax revenue.

However, the legal community, represented by figures like David McNeill of the Law Society, argues that such a move could undermine the profession's role in economic expansion. Moreover, experts warn against exempting specific groups like family doctors from this tax change, as it may lead to economic imbalances and tax avoidance opportunities.

(With inputs from agencies.)