Freebies
1st Friday
Tax Chat
News
App

Reminder to salaried members of LLPs – time is running out !

Reminder to salaried members of LLPs – time is running out !

The ICAEW is reminding all salaried members of LLPs that they need to inject the required amount of capital prior to 5 July 2014 if they are to avoid being treated as employees

Anti-avoidance provisions were introduced with effect from 6 April 2014 targeted at partners of LLPs who have fail certain stated tests.

One of the tests for members of LLPs be treated as employees for tax purposes and to be subject to PAYE and Class 1 national insurance, is that the member’s contribution to the LLP is less than 25% of their disguised salary.

To avoid being caught by these rules, members of LLPs need to make an injection of capital to bring their contribution up to the limit of 25% or more.   The guidance allowed members to give an undertaking prior to 6 April 2014 that the capital would be introduced, provide they did so by 5 July 2014.

Those who join LLPs after 5 April 2014 are subject to similar rules.  They must make a firm commitment, on the day they become a member of the LLP, to contribute an appropriate amount of capital within two months of their admission.

Click here for more details http://www.ion.icaew.com/TaxFaculty/post/LLPs–a-reminder-of-the-5-July-deadline-for-injecting-capital

Share Button