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Rachel Reeves is set to launch a £2 billion tax raid on lawyers, GPs and accountants as she battles a £30 billion black hole in the public finances before next month’s Budget. The levy—equivalent to a cut-rate employer’s national insurance hit on partnership profits—would end the self-employed perk enjoyed by more than 190,000 workers, who dodge the standard 15% employer contribution. Economists at the Centre for the Analysis of Taxation calculate it would add £23,000 to the bill of an average £316,000-earning solicitor, hiking their effective tax rate by 7.3%.

The sector is stacked with big earners: over 13,000 partners pocket £1.25 million on average yearly, solicitors average £316,000, accountants £246,000 and family doctors £118,000. Solicitors account for a fifth of all partnership income, according to CenTax data. The Chancellor deems it unfair and wants it partly aligned with employee tax rules, without a full self-employment overhaul.

The LLP details leaked via briefings to The State of It, the political podcast from The Times and The Sunday Times. Treasury sources hint at further measures targeting the wealthy, such as a “mansion tax” that would impose capital gains on luxury home sales.

Incoming Office for Budget Responsibility forecasts will likely slash growth outlooks, forcing her to ditch Labour’s no-rise pledge on income tax, VAT or National Insurance.

Arun Advani, CenTax director, called the loophole a fluke. He said: “Like so much of the UK tax system, the absence of employer NICs [national insurance contributions] on partners comes from a sequence of small accidents, rather than any deliberate design.

“Since partnership income is hugely concentrated, with almost half going to those in the top 0.1%, exempting partners from any equivalent to employer NICs is very regressive and simply means higher taxes for everyone else.”

Stuart Adam, senior economist at the Institute for Fiscal Studies, flagged risks. He said: “People in LLPs are generally very well off and in many cases are just supplying their labour like ordinary employees are, so it’s not clear why they should get preferential treatment.

“But as with any tax rise, it can provide a disincentive to work. There may be other ways that people might respond, including in the most extreme cases leaving the UK or not coming in the first place.”

Conservative leader Kemi Badenoch hit back at Monday’s Office for National Statistics data—revealing £99.7 billion borrowed April to September, the worst non-Covid total—posting on X: “Today’s borrowing figures show an economy spiralling out of control.

“Why? Because we have a Prime Minister without a backbone. Too weak to take the difficult decisions needed to build a stronger economy. Only the @Conservatives have a plan to cut spending by £47bn.”

Shadow chancellor Sir Mel Stride slammed the path as a recipe for a deeper slump.

The Policy Exchange think tank’s latest report advocates £115 billion in yearly spending cuts to dodge a “twin-pronged fiscal crisis” of debt and deficits.

Endorsed by ex-Office for Budget Responsibility chair Robert Chote, it shuns tax grabs for lower spending: junk the state pension triple lock to save £22 billion via a three-year freeze then CPI tie; £30 billion off welfare by freezing working-age benefits and tightening personal independence payments; trims to foreign aid, housing aid and green handouts.

It floats NHS tweaks like GP appointment fees. The report warns: “These cuts are staring us in the face,” and presses for Whitehall-wide productivity drives, mirroring Mr Chote’s call for “radical” fixes to spark growth.

Ms Reeves has cast such measures as vital for fiscal repair, insisting high rollers must chip in more.

Speaking last week, she said: “I do think those with the broadest shoulders should pay their fair share of tax. “

She has pinned the squeeze on past missteps, telling business chiefs in Birmingham on Tuesday: “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.”

With the Budget closing in, Ms Reeves treads a tightrope: squeezing the wealthy amid dim growth signals. The OBR’s productivity probe, out soon, will nail Brexit’s bite—extra business costs since 2016—and shape EU thaw plans to ease them.

However, sky-high borrowing leaves little room, fuelling demands for a total reset over spot fixes.