{
  "id": 16739471,
  "title": "Possible tax hikes for LLPs in Budget may ‘distort’ the market and push firms overseas",
  "url": "https://urgent.news/2026/10/27/possible-tax-hikes-for-llps-in-budget-may-distort-the-market-and-push",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-10-27T11:16:01.000Z",
  "source": {
    "name": "City AM",
    "slug": "city-am",
    "url": "https://www.cityam.com/possible-tax-hikes-for-llps-in-budget-may-distort-the-market-and-push-firms-overseas/"
  },
  "original_language": "en",
  "account": "The upcoming UK Budget may introduce tax hikes for Limited Liability Partnerships (LLPs), according to experts, which could potentially \"distort\" the market and drive firms overseas. Last year's Budget saw whispers of tax hikes on LLPs, but after lobbying from the professional services sector, Chancellor John Healey rolled back the plans. However, with nothing confirmed yet, there are concerns that the government could still impose changes that would disproportionately impact LLPs.\n\nLLPs are a popular structure among professional services firms, including law firms, accountancy firms, and some doctors. They allow members to invest their own capital, take on the risk, and avoid corporate tax on their profits. However, partners in LLPs already face tax rates close to 50%, meaning they would likely bear the brunt of any additional taxes on the firms.\n\nExperts warn that imposing tax hikes on LLPs could lead to competition issues and disruption in the market. Large law firms, which are not set up as LLPs, might choose to move their operations offshore to avoid the additional tax burden. This could have a knock-on effect for customers, employees, and business investment in the UK.\n\nSean Drury, Head of tax at Blick Rothenberg, advises the government to be cautious about imposing taxes on LLPs, as the partnership structure has been effective in attracting professional and financial services organizations to the UK. He also notes that similar structures are available elsewhere, and the government should consider the potential negative impact on the UK's international position.\n\nThe legal sector, including industry bodies like the Law Society and the City of London Law Society, has previously raised concerns about any proposals to extend national insurance contributions to LLP partners. They argue that such changes would be unfair and damaging to growth, as LLPs already face significant tax pressures. Any changes to the LLP structure should be made after proper consultation with the professional services sector.",
  "summary": "Despite the professional services sector dodging tax hikes on LLPs in last year’s Budget, it remains unclear whether Chancellor John Healey will impose tax changes this time round, but Rosie Harris-Davison writes that experts have warned against any tax burdens on the sector. In the lead-up to last year’s Budget, whispers circulated for weeks that [...]",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "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."
}