Reeves 'to target GPs, lawyers and accountants in tax raid' to fix Budget black hole
The Chancellor will target limited liability partnerships to fill the £50billion black hole in Britain's finances
Rachel Reeves is set to target lawyers, GPs and accountants with a tax raid as she looks to shore up Britain's public finances at the Budget.
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In the difficult fiscal event, the Chancellor is expected to announce a charge for workers using a limited liability partnerships (LLPs) in a move expected to raise £2 billion.
The UK has 355,760 LLPs with with 86,030 of them having employees, according to Money.co.uk.
The tax arrangements are common in the legal sector - and partnerships do not pay employer's national insurance contributions because they are treated as self-employed.
But they are also used by GP practices and accountants because of their tax benefits.
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Partners also pay a lower rate of employee national insurance - but Ms Reeves is set to announce changes to the system according to The Times.
A new charge is being planned to be imposed on LLPs to "equalise the tax treatment" - but the levy is still set to be at a lower rate than employers' national insurance.
According to the Independent, the Centre for the Analysis of Taxation (CenTax) found that solicitors receive a fifth of all partnership income, averaging £316,000 each in company profits a year.
For GPs, the average is £118,000 and for accountants £246,000.
The wealthy are likely to be the main target of the tax rises in the Budget in November.
The Chancellor is also expected to announce a “mansion tax”, imposing capital gains tax on the sale of the most expensive homes.
Last month, Ms Reeves said: “We know the OBR — I think are going to be pretty frank about this — [will say] that things like austerity, the cuts to capital spending and Brexit have had a bigger impact on our economy than was even projected back then.
“That is why we are unashamedly rebuilding our relations with the EU to reduce some of those costs that in my view were needlessly added to businesses since 2016 and since we formally left a few years ago.”