Rachel Reeves is reportedly preparing to launch a £2 billion tax raid on high-earning lawyers, family doctors and accountants.
The Chancellor is expected to use next month’s Budget to target the wealthy as she seeks to fill an estimated £50bn black hole in the public finances.
She is considering a new tax hit on more than 190,000 people who use limited liability partnerships, according to The Times.
They offer a significant tax benefit over ordinary employment terms as they are not subject to employers’ national insurance, because partners are treated as being self-employed.
In a nod to her plans, Reeves has hinted those with the “broadest shoulders” should pay “their fair share of tax”.
More than 13,000 partners earn an average of £1.25 million each a year.
Lawyers who draw profits from such schemes make an average of £316,000 a year, family doctors about £118,000 and accountants around £246,000.
A solicitor in a partnership earning the average £316,000 would face a charge of £23,000 under proposals drawn up by economists, equivalent to an average tax rate of 7.3 per cent.
Ahead of tax rises and spending cuts, Reeves on Tuesday said Brexit made the UK’s economy and productivity “weaker” than initially forecast when we left the European Union.
She added the autumn statement will detail her “plans based on the world as it is, not necessarily the world as I might like it to be” as global volatility and a hike in defence spending “puts pressure on our economy”.
The Treasury was approached by the Standard.
A source said the Chancellor decides tax policy at fiscal events and does not comment on speculation around changes outside of those.
It comes as Ms Reeves was handed a welcome pre-Budget boost with the rate of inflation unexpectedly remaining unchanged at 3.8% in September.
It was the third month on the trot that the Consumer Prices Index (CPI) has stayed at the same level.
Many City forecasters had feared that the CPI could have hit 4% and some commentators said that the recent inflation resurgence may have peaked.
