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HMRC internal manual

Employment Status Manual

Salaried Members: Implementation Matters: Partnership Returns

As the Salaried Member is not treated as a partner for tax purposes, they are not included on the partnership return for a period when they are a Salaried Member.

If the circumstances of an individual changes and they are treated as a partner for part of the period, then they need to be included in the return for that part period.

This means that an individual who is determined to be a Salaried Member at 6 April 2014 when the legislation comes into effect would be included in the partnership return for the period up to 5 April 2014, and they would be treated as ceasing as a partner on that date.


*Example *

This example considers how to deal with the returns for the LLP.

M has been a member of ARC LLP since 1 July 2010. ARC LLP commenced trading in 2001 and has had an accounting date of 30 June throughout. Prior to 6 April 2014, ARC LLP carries out a review of its membership as a result of the new Salaried Member rules.

The review shows that M satisfies all three conditions and so M will be a Salaried Member as of 6 April 2014.

The nominated member will include M on the partnership return as a partner for the period up to 5 April 2014. ARC LLP will then treat M as an employee and operate PAYE from 6 April 2014.