{
  "id": 10697740,
  "title": "Legal sector warns against tax ‘raid’ proposal on client account interest ahead of Budget",
  "url": "https://urgent.news/2026/09/29/legal-sector-warns-against-tax-raid-proposal-on-client-account",
  "topic": "world",
  "section": "World",
  "published": "2026-09-29T13:27:36.000Z",
  "source": {
    "name": "City AM",
    "slug": "city-am",
    "url": "https://www.cityam.com/legal-sector-warns-against-tax-raid-proposal-on-client-account-interest-ahead-of-budget/"
  },
  "original_language": "en",
  "account": "The London legal sector has raised concerns over government proposals to reduce interest earned on client accounts for law firms, in order to fund the justice department. This announcement was made after the previous secretary of state for justice, David Lammy, introduced the plan in January. The consultation on the \"Interest on Lawyers' Client Accounts Scheme\" (ICLA) concluded in March. The City of London Law Society, led by Colin Passmore, expressed opposition to the proposal, stating that it would harm smaller firms that are crucial for providing services to clients. They argue that diverting interest from lawyers' client accounts is a form of taxation that will increase costs for clients and undermine access to justice. The Ministry of Justice, however, remains open to considering the feedback received during the consultation. The current secretary of state for justice, Alex Norris, emphasized that the government is investing record amounts and reforming the justice system for swifter justice. The proposal, if implemented, would remit 75% of the interest generated on pooled client accounts to the government, while 50% of the interest earned on individual accounts would also be remitted. Nick Leale, a partner at CM Murray, criticized the government for not considering alternative solutions, such as ring-fencing the money for legal aid. The Law Society of England and Wales, represented by Mark Evans, also opposed the scheme, stating that it would be \"flawed, sets a damaging precedent, and conflicts with wider government commitments.\" According to data from Taha Capital, the top 200 law firms in the UK made between £250m and £295m in client account interest in 2025, with the reliance on this interest increasing to its highest level ever. Adil Taha, founder of Taha Capital, warned that hundreds of law firms could go out of business if the MoJ takes client interest.",
  "summary": "London’s legal sector has sounded the alarm over government plans to cut interest on law firms’ client accounts to fund the justice department, warning it could drive some law firms out of business. The Ministry of Justice’s consultation on a proposal to introduce an Interest on Lawyers’ Client Accounts Scheme (ICLA) closed in March after [...]",
  "key_points": [
    "London legal sector warns against tax proposal on client account interest.",
    "City of London Law Society fears harm to smaller firms and access to justice.",
    "Ministry of Justice open to considering feedback from consultation."
  ],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 2,
    "also_reported_by": [
      {
        "outlet": "Daily Post Nigeria",
        "title": "Tinubu sends NDDC’s 2026 Budget Proposal to House of Representatives",
        "url": "https://urgent.news/2026/09/29/tinubu-sends-nddcs-2026-budget-proposal-to-house-of-representatives",
        "published": "2026-09-29T14:40:25.000Z"
      }
    ]
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}