The tax gap on carried interest allows private equity (PE) fund managers to access capital gain tax rates of 28%, rather than those of income tax rates, which attracts a top tax rate of 45% on earnings over £125,000, plus national insurance contributions of 2% over £50k.

One of Labour’s key tax measures includes a change to carried interest, closing the loophole on one of three main income streams accessed by private equity fund managers.

The accountancy sector has seen massive investment from private equity firms in recent years with groups like Azets, Sumer and Xeinadin growing rapidly through private equity backed acquisition funds.