The upcoming budget, set for November 26, may include changes affecting partnerships in various professions, such as law, accounting, and medicine. Chancellor Rachel Reeves has indicated a potential end to the exemption on employer national insurance contributions (NICs) for limited liability partnerships (LLPs). Currently, LLP partners, who are often self-employed, do not pay employer NICs, which are typically assessed at a rate of 15%.
More than 190,000 people are employed in LLPs, and many partnerships—especially large law firms—utilize this structure. Partners are subject to income tax on their profits, but the absence of employer NICs has been characterized as inequitable by government sources. Reports suggest that a revised employer NIC rate may be introduced for partners.
The proposed changes would likely impact solicitors, accountants, and privately practicing doctors, with estimates from the Centre for Analysis of Taxation (CenTax) indicating significant income for these professions. For instance, solicitors reportedly earn an average of more than £300,000 annually from partnerships, while accountants and general practitioners earn averages of £246,000 and £118,000, respectively. Last year, these partnerships were not subject to a previous rate increase to 15%.
Reactions to these proposed changes have been mixed. Critics from the medical and legal sectors assert that higher tax contributions could result in increased costs for patients and hinder the competitiveness of private practices. Contrastingly, some experts advocate for a more uniform tax approach across different types of partnerships. CenTax estimates indicate that bringing LLPs into the employer NICs framework could raise approximately £1.9 billion for the government.
Concerns have also arisen regarding the potential for tax changes to prompt professionals to relocate abroad. While some individuals may be able to move freely to other markets, the Chancellor has emphasized the importance of maintaining the UK as an attractive destination for talent. The Treasury has not commented on future tax speculation.
Source: https://www.theguardian.com/uk-news/2025/oct/23/how-might-rachel-reeves-target-lawyers-accountants-and-doctors-in-her-budget