An influential coalition of leaders from Britain’s professional services sector has warned Rachel Reeves that a Budget tax raid on the sector would «stunt growth» in the UK’s faltering economy.
Sky News has obtained a letter sent to the chancellor on Thursday which was signed by leading figures including the president of The Law Society, the chief executive of the Institute of Chartered Accountants in England and Wales, and the bosses of other leading trade bodies including TheCityUK and the BVCA.
In it, they warn that reported plans to impose employers’ national insurance on limited liability partnerships (LLPs) would damage Britain.
«Such a move would strike at the heart of a sector that is not only growing but actively partnering with Government to deliver economic growth,» they wrote.
«Our professional services sector sits among the UK’s global success stories – driving investment, creating jobs, and reinforcing the UK’s reputation as an attractive place to do business.
«Introducing higher taxes on LLPs now would be a misstep and will stunt growth.
«It would undermine the Government’s stated ambition to support professional services as a growth partner and send a damaging signal to international investors.
«At a time when firms are already facing potential major regulatory changes – from anti-money laundering compliance to evolving tax adviser rules – this additional burden risks creating a perfect storm that stifles investment, hiring, and innovation.»
The letter warned that the mooted tax changes would force firms to reconsider their corporate structures, «triggering instability and uncertainty across our economy».
«Meanwhile, our global competitors – many of whom are actively courting professional services firms – would seize the opportunity to attract talent and capital away from the UK» it added.
The letter was also signed by the City of London Law Society and The City of London Corporation.
It has been sent to the chancellor less than two weeks before she delivers her Budget, and adds to the multitude of warnings from across the economy about the levers she intends to pull to plug an estimated £30bn fiscal black hole.
Last week, the Financial Times reported that a potential tax raid on LLPs was likely to be less severe than feared following warnings from senior sector figures.
The Treasury has declined to comment on the prospective move.