Rachel Reeves is reportedly preparing to target high-earning professionals including lawyers and accountants in her bid to close a multibillion-pound gap in the public finances.
The Chancellor is considering a new levy on limited liability partnerships (LLPs) that could raise around £2bn when she delivers her first Budget on November 26.
The proposed change would see LLPs – used by an estimated 190,000 people across the UK – brought into the scope of employers’ National Insurance for the first time. At present, partners in these firms are classed as self-employed and do not pay the charge.
The Telegraph reports that the Treasury is reviewing the plan following a report from the Centre for the Analysis of Taxation, which described the exemption as an “accident of history” and called for the introduction of “partnership NICs”.
The move would form part of a wider package of tax rises aimed at those with “the broadest shoulders” as the Government struggles to contain borrowing.
Reeves has blamed a “black hole” of up to £20billion on the economic impact of Brexit, saying she must now raise more revenue than originally planned.
Ms Reeves said: "We also know – and the OBR, I think, is going to be pretty frank about this – that things like austerity, the cuts to capital spending and Brexit, have had a bigger impact on our economy than even was projected back then.
“That’s why we are unashamedly rebuilding our relations with the European Union to reduce some of those costs.”
Opponents have accused the chancellor of using Brexit as a scapegoat for rising borrowing. Nigel Farage branded her comments “lame excuses from a failing Chancellor”, while Tory shadow chancellor Mel Stride said: “Rachel Reeves has lost control of the public finances".