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The Chancellor George Osborne yesterday confirmed that there would be no delay in introducing the changes to the way LLPs are taxed, which has left many firms seeking funding for capital contributions.

Reformed HMRC rules dealing with the taxation of partnerships will obstruct “innocent” firms trying to invest in their businesses and force them to modify their profit-sharing arrangements, according to a leading firm of accountants.

HMRC is set to scrutinise the status of law firm partners after measures announced in the Budget. The Treasury is to consult on removing the presumption of self-employment for LLP partners and on countering the “artificial allocation of profits to partners”.

Is partnership an “inefficient and unattractive” structure that should be ditched to survive in the new legal marketplace, or is it a viable current model with much to offer lawyers wanting flexible governance and discretion? Both sides were put at a conference this week.

The number of incorporated law firms has risen sharply in the past year, with more than a fifth of legal practices now limited companies. According to Solicitors Regulation Authority figures, 2,400 of the 10,973 law firms as of July were incorporated companies, compared to 1,898 a year before – a rise of 26%.