Rachel Reeves to launch £2billion tax raid on doctors, lawyers and accountants as she targets wealthy in Budget

Jonathan Reynolds on wealth tax |

GBNEWS

Temie Laleye

By Temie Laleye


Published: 21/10/2025

- 18:57

Updated: 21/10/2025

- 19:03

The Chancellor's plan would see thousands of top earners face new charges on partnership income

Rachel Reeves is expected to unveil a £2billion tax charge on lawyers, family doctors and accountants as part of plans to balance the nation’s finances by targeting high earners.

The Chancellor is expected to use the upcoming Budget to introduce a new levy on those operating through limited liability partnerships in a bid to help close a £30billion gap in public finances.


More than 190,000 professionals in the UK currently work through partnership structures that offer significant tax advantages compared to regular employment.

These set-ups allow partners to be classed as self-employed, meaning they don’t pay employer National Insurance contributions. The Treasury argues that this system is unfair, especially as many of those benefiting are among the country’s highest earners.

Ms Reeves has consistently emphasised that individuals with "the broadest shoulders" must contribute their "fair share of tax" to support public services.

Under the proposed plans, new charges would be introduced on partnership structures, set slightly below the standard 15 per cent employer National Insurance rate.

The financial hit for those affected could still be significant. Economic analysis suggests that legal professionals earning around £316,000 from partnerships could face an extra £23,000 in tax, an effective rate of 7.3 per cent.

Amongst the highest earners, over 13,000 partners generate average annual incomes of £1.25 million.

RACHEL REEVES

The financial hit for those affected could still be significant

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Medical practitioners in partnerships earn considerably less at £118,000 on average, whilst accounting professionals typically receive £246,000 annually.

The Centre for the Analysis of Taxation revealed that legal professionals alone account for one-fifth of total partnership income across the UK, highlighting the concentrated nature of these earnings amongst specific professions.

Economic experts have expressed mixed views on the partnership tax reforms.

Stuart Adam from the Institute for Fiscal Studies noted that whilst partnership workers often perform similar duties to regular employees, the changes might discourage work or prompt departures from Britain.

Doctor

While Ms Reeves has ruled out imposing a new wealth tax

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Arun Advani of CenTax argued the current exemption resulted from "a sequence of small accidents" rather than deliberate policy design, with nearly half of partnership income flowing to the wealthiest 0.1 per cent.

The chancellor has linked the necessity for revenue-raising measures to the lasting effects of Brexit and austerity policies, which she claims have damaged public finances more severely than initially anticipated.

While Ms Reeves has ruled out imposing a new wealth tax, a package of tax rises is likely, especially if the Office for Budget Responsibility downgrades growth forecasts, as is expected.

Tax folder

The Chancellor's plan would see thousands of top earners face new charges on partnership income

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Economists believe it is increasingly likely that Ms Reeves will have to break her manifesto pledge not to increase income tax, VAT or national insurance to ensure that she can balance the books.

Ms Reeves said: "We know the OBR — I think are going to be pretty frank about this — [will say] that things like austerity, the cuts to capital spending and Brexit have had a bigger impact on our economy than was even projected back then.

"That is why we are unashamedly rebuilding our relations with the EU to reduce some of those costs that in my view were needlessly added to businesses since 2016 and since we formally left a few years ago."

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