London Lawyers to Pay Millions More in Taxes

Yesterday, UK Chancellor Alistair Darling announced an increase in personal taxation, which amount to 50% rate. London solicitors say that the new measure will seriously affect their incomes. The new tax rate, which will be applied to earning that exceed £150,000, will come into effect in next April – much sooner than it was expected. Giles Murphy, a representative of Smith & Williamson's said that as the new top tax rate will come into effect, many law firms will be obliged to consider alternative business structures in order to lower their tax burden. He said that law companies are global structures, which means that they can switch tax systems if they move their offices. He also said new taxes will act as deterrents for lawyers to stay in the country. He claimed that in the long term, law firms will be able to incorporate themselves as part of the Legal Services Act to potentially gain some income. He said that more law firms now see incentives in having income in capital gains.