A lobbying group representing UK start-ups will this week warn Rachel Reeves against a tax raid on limited liability partnerships (LLPs), arguing that it would hit the backers of Britain's most innovative companies.

Sky News has seen a letter to be sent to the chancellor on Monday, in which the Startup Coalition will argue that imposing employers' National Insurance Contributions (NICs) on venture capital funds could make UK fund launches "commercially unviable".

Venture capital firms, along with private equity firms, law firms and accountants were alarmed last week by speculation that Ms Reeves was planning to raise close to £2bn by taxing LLPs in this way.

Treasury officials are said to be in talks about the move ahead of next month's crucial budget statement.

Please use Chrome b

See Full Page