Partners in accountancy firms face a £671m increase in tax liability if the government charges employers National Insurance contributions on partnerships, threatening the inherent structure of the profession
The potential tax bill from a new partnership NI would be hugely damaging to the accountancy sector, based on the propensity for firms to structure as partnerships rather than limited companies.
This figure is based on applying the employer NIC 15% rate to the £4.47bn in total profits made by accountancy firm partners in the UK in 2022-23, based on data provided by HMRC to UHY Hacker Young, the national accountancy group.
In the latest Business & Accountancy Daily Top 75 Firms Survey, 65% of the leading UK accountancy firms are structured as limited liability partnership (LLPs), being the largest and between these firms alone there are 7,310 partners. Only the influx of private equity has reduced the number of LLPs in the accountancy sector in the last five years with 23% of the top firms now owned by external investors.
