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HMRC internal manual

Employment Status Manual

HM Revenue & Customs
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Salaried Member: Condition C: Deemed contributions: failure to make the payment

ITTOIA/S863F (4)

If the individual fails to make all, or part, of the contribution within that period, then the determination of whether Condition C was met is revisited as at the time it was originally made without taking into account so much of the deemed contribution as was not in fact paid.


*Example *

This example shows how the Deemed Contribution rule works if the member does not in fact make the contribution which was expected.

M is an existing member of an LLP at 6 April 2014 who has not previously contributed capital to the LLP. On 5 April 2014, M gives an undertaking to the LLP that he will make a contribution of £50,000 on 5 July 2014.


The question whether Condition C is met is determined on 6 April 2014 and takes into account the deemed contribution of £50,000 resulting in Condition C not being met. M fails to make any of the contribution by 5 July 2014.

On 6 July 2014, the question of whether Condition C was met at 6 April 2014 is revisited. M is not treated as having made a contribution so Condition C is met. If M also meets Conditions A and B on 6 April 2014, then M is treated as a Salaried Member from that date.