The proposal involves extending the equivalent of employer National Insurance contributions (NICs) to partners, a move estimated to affect around 200,000 people and raise up to £1.9 billion for the Treasury.

The policy is being explored to help fill a fiscal hole estimated at £20-£30 billion and to address what influential think-tanks describe as an unfair tax advantage for partners over regular employees. While the Treasury has declined to comment on Budget speculation, officials highlighted the Chancellor’s recent statement that she wants the wealthy to pay their “fair share”. The proposal has been championed by organisations including the Centre for the Analysis of Taxation (CenTax) and the Resolution Foundation, whose former director is now a Treasury minister helping to shape the Budget.

A recent CenTax report, understood to have caught the Chancellor’s attention, found stark disparities in earnings. It revealed that 46% of all partnership profits are made by the top 0.1% of earners and that a quarter of UK partnership income is concentrated in just twelve parliamentary constituencies.

The report estimated that levying new ‘partnership NICs’ would raise £1.9bn in 2026-27, with 98% of the revenue coming from the top decile of earners. The tax would apply to all partnership structures, including limited liability partnerships (LLPs).

The proposal has drawn criticism from professionals. One tax partner called the idea a “bad joke”, warning it ignores the financial risks partners undertake and could lead to an exodus of talent, ultimately reducing tax revenues. Another expert suggested the Chancellor was picking an “easy target” where public sympathy would be limited, and that the Treasury may simply increase the rate of NICs for all partners to avoid complexity. The plan is being considered alongside other wealth tax reforms, including changes to property taxes on large homes.