UUÂãÁÄÖ±²¥

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

Corporation Tax

Qualifying charitable donations

Qualifying charitable donationsCompanies can obtain corporation tax relief for qualifying payments or certain transfers of assets to charity under the qualifying charitable donations regime. Definition of qualifying charitable donationThe definition of ‘qualifying charitable donations’

14 Jul 2020 13:03 | Produced by Tolley Read more Read more
Personal Tax

Self assessment ― estimates and provisional figures

Self assessment ― estimates and provisional figuresIf the taxpayer does not have sufficient information to enable them to complete the tax return in the time allowed, they should include either a best estimate or a provisional figure. The taxpayer should not either leave a box blank or enter

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

Computation of corporation tax

Computation of corporation taxCompanies pay corporation tax on the taxable total profits (TTP) generated in a chargeable accounting period (CAP).To ascertain whether the entity is within the charge to corporation tax, see the Charge to corporation tax guidance note.For more information on the type

14 Jul 2020 11:16 | Produced by Tolley Read more Read more