Ignition Law partners Tammy Evans and Alex McPherson were recently featured in LPM Magazine, offering insight into how recent Budget measures continue to affect law firms and the SMEs they support.
Commenting on the increase in income tax applicable to dividends, Tammy Evans, Partner at Ignition Law, highlighted the direct impact on law firm partners and directors who extract profits through limited companies.
“This will mean looking harder at how and when profits are extracted, and whether keeping cash in the business, paying into pensions, or rebalancing salary and dividends now makes more sense for sustainable growth,” Tammy said.“If you’re changing how profits come out of the company, you need to keep it lawful and defensible: backed by proper board decisions and paperwork, and aligned with shareholder arrangements.”
Looking more broadly at the structural direction of the legal sector, Alex McPherson, Founder and Partner at Ignition Law, expects continued growth in flexible legal services and alternative business models.
“Many law firms which were already considering alternative business structures and/or converting into a private limited company are likely to continue to weigh up these options,” Alex explained,
“especially with growing pressures around investment in AI and technology, and opportunities in the legal sector mid-term.”
On a more positive note, Tammy also pointed to increased funding for apprenticeships as a meaningful opportunity for progressive firms.
“For smaller and mid-sized practices, this is a chance for the progression of home-grown, trusted talent with lower upfront cost — so long as firms put proper training plans and supervision in place,” she said.“Firms will need robust training structures to ensure supported, happy juniors, and to meet the compliance and audit requirements that are likely to follow.”
Many of the themes raised in the article, from profit extraction strategies to investment planning and talent development, remain highly relevant as businesses and professional services firms prepare for upcoming fiscal announcements later in the year.
Read the full article in LPM Magazine:
https://www.lpmmag.co.uk/blog/autumn-budget-2025/
https://www.lpmmag.co.uk/blog/autumn-budget-2025/
