Chancellor reportedly set to target LLPs
Law firm partners could be hit with a new tax under plans reportedly being considered by the government.
Chancellor Rachel Reeves is said to be preparing a £2 billion “tax raid” on lawyers, doctors and accountants who operate through limited liability partnerships (LLPs), as she looks to plug a £30 billion hole in the public finances.
The potential move, first reported by The Times (£), would impose a new charge on people who use LLPs — a business structure common among major law and accountancy firms. LLPs allow members to share profits while enjoying limited personal liability, but partners are treated as self-employed and are not subject to employer’s national insurance contributions, currently 15%. The new charge would reportedly be designed to mirror this, effectively bringing partners more in line with employees for national insurance purposes.
More than 190,000 workers use partnerships in the UK, with lawyers making up a significant share. The Centre for the Analysis of Taxation (CenTax) found that solicitors receive a fifth of all partnership income, averaging more than £300,000 each in profits annually.
Reeves is said to consider the current system “unfair” and is expected to “equalise the tax treatment” of partners and employees. The proposed charge would reportedly be set slightly below the employer’s rate of national insurance.
Economists estimate that a solicitor in a partnership earning the average £316,000 would face an additional charge of around £23,000 — roughly equivalent to a 7.3% tax rate. But many partners could be hit far harder, with The Legal Cheek Firms Most List 2026 showing that some top earners take home profits well into the millions.
Law firm partners aren’t the only ones who could be affected. Family doctors earn an average of £118,000 a year through partnerships, while accountants average £246,000.
The proposals form part of what’s been described as a broader effort to ensure “those with the broadest shoulders” pay their “fair share of tax”, alongside other expected measures such as a potential “mansion tax” on the sale of high-value homes.