ÀÏ˾»úÎçÒ¹¸£Àû

Salaried members of LLPs


Produced by Tolley in association with
Owner-Managed Businesses
Guidance

Salaried members of LLPs


Produced by Tolley in association with
Owner-Managed Businesses
Guidance
imgtext

This guidance note covers the salaried members rules which are anti-avoidance provisions which treat partners as employed rather than self-employed if all necessary conditions are met. They were introduced to counteract the disguising of employment relationships through LLPs. Where the ‘salaried members’ rules apply, they bring a member of an LLP within payroll immediately. Therefore, members caught by this rule may be liable for PAYE.

For further information on salaried members, see Simon’s Taxes B7.514 and HMRC manuals from PM250000 onwards.

Salaried members of LLPs

The ‘salaried members’ legislation affects LLP members who receive earnings which are more akin to salary than genuine profit.

If the three conditions for salaried members are met, an individual member of an LLP is to be treated as an employee by the LLP for tax purposes only. All rights and duties as a member of the LLP are to be treated as if they were agreed under a contract of service.

This means that shares of profit will be treated as salary subject to income tax

Continue reading
To read the full Guidance note, register for a free trial of Tolley+â„¢
TAKE A FREE TRIAL
Jackie Barker
Jackie Barker

Tax Partner at Wells Associates , Corporate Tax, OMB, Employment Tax, Personal Tax, VAT, IHT Trusts and Estates, Accounting

I have worked in tax since becoming an associate of the CIOT in 2004, having previously qualified as a member of ACCA.As tax partner with Wells Associates I advise on all aspects of direct taxation including personal and corporate planning. We work with a wide range of individuals and owner-managed businesses offering guidance and support at all stages, from assisting with compliance matters through to advising on more complex strategic matters and providing tax efficient solutions.

Powered by
  • 03 Feb 2025 06:47

Home/ Tolley Tax Guidance/ Owner-Managed Businesses / Advising partnerships

Popular Articles

Corporation Tax

Group relief for carried-forward losses

Group relief for carried-forward lossesThis guidance note examines in detail the relief available to groups for carried-forward losses. The scope excludes the treatment of specialist businesses such as banks, insurance companies and oil and gas companies.From 1 April 2017, companies can surrender

14 Jul 2020 11:50 | Produced by Tolley Read more Read more
Corporation Tax

Carried-forward losses restriction

Carried-forward losses restrictionOverview of the carried-forward loss restrictionAn important restriction in the use of losses carried forward was introduced by Finance (No 2) Act 2017. Subject to a de minimis of £5m (known as the deductions allowance), most carried-forward losses are restricted to

14 Jul 2020 11:09 | Produced by Tolley Read more Read more
Personal Tax

Self assessment ― amendments and corrections

Self assessment ― amendments and correctionsOnce a self assessment tax return has been filed, both HMRC and the taxpayer (or the agent) has the right to make changes to the return. There are different time limits depending on whether it is a correction by HMRC or an amendment made by the

14 Jul 2020 13:37 | Produced by Tolley Read more Read more