UK accountancy firms lobby against anticipated tax changes

Core Viewpoint - UK accountancy firms are lobbying against anticipated tax reforms that could affect partnership structures, with concerns rising across various professional sectors as the Chancellor is expected to announce changes in the upcoming Budget [1][4]. Group 1: Tax Reforms and Implications - The Centre for the Analysis of Taxation estimates that around 200,000 individuals could be affected by the proposed tax changes, potentially generating £1.9 billion ($2.5 billion) annually for the government [2]. - The proposed changes may eliminate the exemption for national insurance contributions for limited liability partnerships (LLPs), raising the marginal tax rate for partners from approximately 47% to 54% [3]. Group 2: Industry Response - Senior representatives from the Big Four accountancy firms and related trade bodies have begun discussions with government ministers in response to the anticipated tax changes [3]. - The industry is questioning whether the government's proposal is a definitive plan or merely a test of reactions, with speculation that firms might pass on additional tax costs to clients, including the UK government [4]. Group 3: Alternative Structures and Contingency Planning - Some firms are considering alternative business structures to mitigate the tax impact, including incorporating as a classic "limited" corporate structure, adopting a general partnership model, or relocating services outside the UK [5]. - Contingency planning is reportedly already underway within some firms to address the potential tax changes [5]. Group 4: Competitive Concerns - A partner from one of the Big Four firms expressed concerns about the UK's competitiveness, acknowledging the Chancellor's challenges in tax collection while cautioning against putting the UK at a competitive disadvantage [6].