Westminster update: LLP tax dropped from Autumn Budget

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Legal sector won't face LLP tax hikes in Autumn Budget

After weeks of speculation about tax increases and spending changes, on Wednesday 26 November, chancellor Rachel Reeves delivered her Budget.

The statement announced around £26bn in tax increases through:

• freezing tax-free allowance thresholds
• raised duties on gambling
• changes to dividend tax rates

However, the chancellor did not go ahead with a rumoured increase in taxes on LLPs, which would have had a significant impact on the legal sector.

Over weeks of speculation, we engaged across the Treasury, Ministry of Justice and Department for Business and Trade to highlight the risks such changes would pose to firms.

Alongside voices across the legal sector and other professional bodies, this helped make sure that no proposals appeared in the final Budget.

The government also announced that from April 2025, it will introduce a revised banding structure for the Economic Crime Levy.

The current “large” band, which covers businesses with revenues between £36m and £1bn, will be split into two separate bands:

• £36m to £500m, and
• £500m to £1bn

The new system will set the levy for all bands at 0.1% of revenue at the bottom of each band, meaning charges will be fixed at:

• £10.2k for Band A
• £36k for Band B
• £500k for Band C
• £1m for Band D

Alongside measures for the legal profession, welfare and workforce measures featured heavily in the statement.

The government announced the removal of the two-child benefit limit, which it estimates will lift 450,000 children out of poverty, rising to around 550,000 when combined with expanded free school meals.

The national living wage will increase to £12.71 per hour from April 2026, giving full-time workers an annual pay increase of around £900.

Public spending will also rise in targeted areas, with the justice budget increasing from £11.1bn in 2024/25 to £13.2bn in 2028/29 in line with the spending review announced earlier this year.

The Welsh government will also receive £320m in additional resource funding and £185m in capital funding.

Further investments in skills and employment announced include:

• expanded apprenticeship support
• a new Youth Guarantee offering six-month paid placements for young people on Universal Credit
• reforms from 2026 to simplify the apprenticeship system

We welcome the continued uplift in justice funding and the significant win on LLP taxation.

However, the lack of new support for civil and criminal legal aid and the limited measures to address court backlogs remain key concerns.

We will continue urging the government to adopt a “spend to save” approach that recognises the long-term value of a well-funded justice system.

In response to Reeves’ speech, the leader of the opposition Kemi Badenoch attacked the chancellor’s announcement as a “Budget for benefit street” and argued that this fiscal announcement would be her last.

The Law Society gives evidence on Hillsborough Law

On Thursday 27 November, we highlighted the importance of legal aid for inquests to the Public Bill Committee on the Public Office (Accountability) Bill (known as the Hillsborough Law).

Richard Miller, our head of justice, gave evidence on the bill to the Committee.

We welcome the legislation but have noted that legal aid providers need investment for the sector to meet the potential demand that will come from the bill.

Miller outlined potential challenges to the bill’s changes to legal aid.

Very few providers carry out inquest work. This reflects the limited scope of inquest and legal aid provision under current legal aid arrangements, together with low fees that haven't increased since 1996.

However, Miller was clear that robust implementation of the bill would help to speed up expansion of the sector to meet demand, reassuring providers that investing in staff and training costs would be met with a need for their services.

He also pointed out that government provision to help the sector plan for sustainable expansion and training would be welcome.

Speaking on parity of arms, Miller highlighted the bill’s duty of candour provisions as a tool to help make inquest proceedings more transparent, reducing the need for oversized legal representation for public bodies.

Similarly, he noted that the bill's ‘polluter pays’ principle would help incentivise public bodies to make sure inquests don't use more time or resource than required for themselves or bereaved families.

The Committee will conclude on 11 December 2025. We will continue to monitor and engage with the bill and parliamentarians to make sure the legislation is as effective as possible.

Restrictions to jury trials discussed in Parliament

On Thursday 27 November, shadow lord chancellor Robert Jenrick asked the justice secretary to respond to reports that the government is considering further restricting the right to trial by jury in almost all but the most serious cases.

Justice minister Sarah Sackman KC noted that no final decision has been made.

She restated that the government inherited a severe crisis in the criminal courts, with record-high and rising court backlogs. The government is considering ways to address these issues, including Sir Brian Leveson's recommendations in part one of the independent review of the criminal courts.

The minister stated that jury trials will remain a cornerstone of British justice, and the right to a fair trial will be protected. However, she also highlighted that around 90% of criminal cases are already handled by magistrates without juries.

She argued that some defendants may be “gaming the system” – later noting that some witnesses and accusers may pull out of jury trials due to extended waits, denying justice to all.

Justice Select Committee chair Andy Slaughter warned that if the lord chancellor plans to go beyond Leveson’s proposals, he must provide clear evidence for why this is needed and how it would avoid undermining the justice system.

He also asked when the government would publish its response to part one of the review, but no date was given.

Liberal Democrat justice spokesperson Jess Brown-Fuller asked whether changes to jury trials would only be temporary and urged greater investment in court infrastructure to address backlogs.

Other MPs echoed this, emphasising funding and efficiency improvements over restricting jury trials.

We have issued our response, with president Mark Evans stating: “This extreme measure on jury trials goes far beyond the recommendations made by Sir Brian Leveson in his independent report. With a sensible combination of funding and structural change, the government can solve the criminal courts backlog without resorting to extremes.”

Terminally Ill Adults Bill: the Law Society’s safeguarding amendment gains support

Committee stage of the Terminally Ill Adults Bill resumed on Friday 21 November, with significant focus on safeguards against coercion and undue pressure.

Lord Sandhurst KC (Conservative) moved an amendment that we had prompted, requiring the secretary of state to issue a statutory code of practice that addresses capacity and coercion.

Peers repeatedly acknowledged our neutral stance on the bill during the debate, framing our contribution as a practical measure to strengthen the bill’s operation.

The bill’s sponsor Lord Falconer (Labour) committed to meeting with Lord Sandhurst to explore incorporating this proposal – which could lead to the amendment being adopted at report stage in the new year.

If adopted, our amendment would introduce a mandatory code of practice, creating a clear framework to address coercion and ensure consistency across England.

This could significantly strengthen protections for vulnerable individuals and set a precedent for future legislation on assisted dying.

The session highlighted ongoing concerns about the bill’s suitability as a private member’s bill, with several peers stressing the need for comprehensive pre-legislative scrutiny.

Amendments ranged from defining “pressure” and mandating financial checks when introducing statutory duties for review panels, but these were largely dismissed.

Lord Falconer’s willingness to consider the Law Society-backed amendment stands out as a win for those advocating for stronger safeguards.

The debate highlighted the complexity of legislating on assisted dying and the importance of uniform standards to prevent coercion across jurisdictions.

Coming up

We are working closely with MPs and peers to influence a number of bills before Parliament: