The head of all famous firms in Britain has warned that Rachel Reves’s Report’s Plan to raise taxes on limited partnerships (LLPS) can drive professionals and entrepreneurs to the UK, the situation in London is close to the Global Bub Hub.
James Libson, managing partner of Mishcon de Reya, said that the proposals to harmonize the LLP tax carefully with the general employment laws with the general rules of risk monitoring to punish business risks and contribute more to the economy.
“Most of the people who use LLPS are in the middle class, people who don’t have a high income,” Libson said. “It means the attractiveness of living here is decreasing. I’m not talking about millionaires or billionaires – ordinary people will look for opportunities to work elsewhere.”
The Chancellor is said to be considering ways to raise the full tax burden on partnerships, following reports that the High Treasury believes the changes could raise LLPs in line with national insurance contributions.
However, Libson described the potential changes as “dangerous and potentially dangerous”, warning that they would be the result of Britain’s brainstorming as financial institutions and financial rivals grow.
“Equity with partners and investors working with LLP properties as employees are selling the proposal in a wrong way,” he said. “The reason the program works is because these people are the people who are investing in their business – they’re putting up the risk, they’re putting up the capital.”
The Treasury refused to confirm or deny that LLPs were targeted in the budget of November 26, although sources told the financial times that any increase would be “without the exemption of partners who receive less than the limit received under a certain limit.
The LLP structure, introduced in 2001, allows professionals to work as partners instead of employees, offering flexibility and tax efficiency. According to Companies House, there are now more than 50,000 LLPs across the UK, Acting Law, Technology, Art, Consultancy and other Professional Services.
Critics say top designers have unfair advantages, but supporters say it has reduced one of Britain’s best sectors to compete globally. The London School of Economics Report found that 0.1% of taxpayers received almost half of all corporate income in 2020.
Libsson insists the perception of LLPS as tax shelters for the ultra-rich is misleading. “This is not a basic hedge of millions,” he said. “They are ways to build skills, employ hundreds of people, and keep Britain competitive in legal and advice services.”
Mishcon de Reya – founded in 1937 and known against Princess Diana in her separation from the Prince of Wales – is reported to have £332 million in pre-tax profits. The company now employs more than 1,400 people, including 650 lawyers.
Reflecting a broader trend among professional service firms, mishcon recently opened offices in Dubai and Abu Dhabi, joining rivals Advelshaw Goddard and simmons and simmons in expanding to the Gulf region, where tax cuts and tax benefits attract foreign talent.
“Strategically We Pursue – Private Wealth, Controversial Innovation – [the UAE] “It’s the Perfect Hub,” Libson said. In addition we saw that London’s magnetism has waned, while other centers of gravity are growing around the world. “
Libson said Miskcon’s migration practice had seen a marked increase in professionals moving to the Middle East – a reflection, he argued, of growing frustration with the UK’s tax and regulatory environment.
“From our internal barometer, we have seen very significant traffic in the Gulf,” he said.
The warning comes as economists estimate that Britain’s top leaders now contribute more than 30% of all income tax receipts, making their departure a major financial risk.
Libson added that, while the industry strategy positively promotes professional services as a growth driver, relationship-building policies will send the opposite message.
“London is still the greatest city in the world – but the debate, as always, the killing, productivity and cutting through bureaucracy is holding us back,” he said. “Other countries do that well.”
Mishcon de Reya’s recent appointment of Dame Alison Rose, a former human rights activist, as non-chair, builds on her advisory work on diversity and inclusion. Libson hailed his appointment as a sign of the firm’s long-term vision.
“Alison is one of the most impressive people I’ve ever worked with,” she said. “Our push for diversity has never been about tokism – it’s about creating an environment where people want to work. It’s as much a business decision as possible.”
With the budget just weeks away, city leaders remain concerned about Reves’ proposed tax rate. For firms like Mishcon de Reya, the outcome could determine whether London remains the beating heart of global services – or whether, as Libson warns, “ordinary people” begin to follow their wealthy clients abroad.
