Since becoming Chancellor, there’s no doubt that Rachel Reeves has made a name for herself with some strong opinions on taxes and a stark reminder that Britain’s economy is not in the greatest of shapes.
Taxation Changes
One of Reeves’ most salient proposals for the upcoming budget is to target LLPs, a legal business structure typically favoured by law firms, doctors and accountants according to Gov.UK.
At present, professionals in LLPS pay taxes on profits as they occur, but each professional is classed as self-employed, which means the businesses are exempt from paying employers’ national insurance, which currently stands at 15%.
Reeves proposes that this system is unfair and that a lower rate of employers’ national insurance will be placed on those in this situation to even up their tax status with those who are classed as employees.
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Considerable Change
Of course, because of the high levels of turnover in accountancy and law firm LLPs, this change could bring about some fairly high tax bills for those involved, and indeed could raise as much as £1.9 billion for the Chancellor’s income in the 2026 to 2027 tax year.
Retaining Talent
As you’d expect, it’s important for the Chancellor to strike the right balance between raising taxes and ensuring talented individuals don’t leave the country en masse in search of a more favourable tax situation.
