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

Access this article and thousands of others like it
free for 7 days with a trial of Tolley+™ Guidance.

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
  • 29 Aug 2024 10:20

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

Popular Articles

Personal Tax

Transferable tax allowance (also known as the marriage allowance)

Transferable tax allowance (also known as the marriage allowance)What is the transferable tax allowance (marriage allowance)?From 6 April 2015, an individual can elect to transfer 10% of the personal allowance (£1,260) to the spouse or civil partner where neither party is a higher rate or additional

14 Jul 2020 13:52 | Produced by Tolley Read more Read more
Owner-Managed Businesses

Special rate pool and long life assets

Special rate pool and long life assetsSpecial rate poolExpenditure on some types of plant or machinery must, if neither annual investment allowance (AIA) nor first year allowances (FYAs) are available, be allocated to a ‘special rate pool’. Expenditure to be allocated to the special rate pool

14 Jul 2020 13:41 | Produced by Tolley Read more Read more
Employment Tax

Long service awards

Long service awardsEmployee recognition by an employer can be an important motivational tool, as well as having a positive effect on retention. Most employer awards made to an employee are treated as taxable earnings under ITEPA 2003, s 62 or as a benefit under ITEPA 2003, s 201 because they are

14 Jul 2020 12:11 | Produced by Tolley Read more Read more