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HMRC internal manual

Employment Status Manual

HM Revenue & Customs
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Salaried Members: Condition A: “Reasonable to expect”


Condition A is applied at the start of the relevant period, looking forward. At this point the actual amounts involved will not always be known, as these may depend upon events that have not yet happened.

As a result Condition A is framed in terms of the total amount that it is reasonable to expect the LLP is to pay to the member for the performance of services.

What the amount is, is a question that should be answered by reference to the substance of the matter taking a realistic view of the facts. The reasonable expectations of the parties to the arrangement, inferred from their actions as well as any documented evidence, should be taken into account.

It is clearly reasonable to expect that an amount contractually due will be paid, but in many cases there will be a range of possible outcomes. Where this is the case, the legislation looks at the most realistic outcome: this is unlikely to be either the most optimistic or the most pessimistic possible result.

The LLP needs to consider any material reasonably relevant to this question – this includes everything relevant to the individual’s expectations, for guidance see ESM61010.