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HMRC internal manual

Partnership Manual

HM Revenue & Customs
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Indirect, capital and transfer taxes and other tax obligations: VAT and partnerships: PAYE and National Insurance: Class 4 NIC relief for partner’s losses

Relief is available where a partner is allocated a loss from the partnership. Claims for losses under Class 4 NIC are made in the same way as for Income Tax purposes. However, it is possible for income tax losses to be set against income that is not liable for Class 4 NIC. If this is the case, the loss is not used for Class 4 NIC purposes and can be carried forward for relief against future Class 4 liabilities arising from the same source, i.e. a profit share from the partnership.

Further guidance is available at NIM24610, with examples at NIM24615.