³ÉÈËÓ°Òô

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 the full document
To gain access to additional expert tax guidance, workflow tools, and tax research, register for a free trial of Tolley+â„¢
TAKE A FREE TRIAL NOW
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
  • 28 Apr 2025 08:11

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

Popular Articles

Personal Tax

Payment of the remittance basis charge

Payment of the remittance basis chargeRemittance basis chargeThe remittance basis charge is an annual charge payable by ‘long-term’ UK residents for the privilege of claiming the remittance basis.Taxpayers who wish to utilise the remittance basis (but do not qualify for it automatically) must pay

14 Jul 2020 12:52 | 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
Value Added Tax

UK VAT invoice requirements

UK VAT invoice requirementsThis guidance note provides details of the information that must be shown on a valid tax invoice. Businesses supplying goods and services that are liable to the standard or reduced rate of VAT are required to issue a tax invoice to another VAT registered person.If the

14 Jul 2020 13:46 | Produced by Tolley Read more Read more