The salaried members rules were introduced in 2014 to counter situations where UK limited liability partnerships (LLPs) were avoiding employment taxes by making junior workers members (rather than employees) without bearing the risks, rewards and responsibilities typically associated with partnership. Under the rules, members of an LLP are treated as employees for tax purposes, unless one of three exclusions apply. However, until now, we have not had a court decision considering their application in detail. This is important as, in the absence of judicial consideration, businesses have had only HMRC's guidance to go on when considering the rules and, unsurprisingly, this takes the view that the exclusions should be interpreted narrowly.
The First-tier tribunal (FTT) has just published its decision in Bluecrest Capital Management (UK) LLP v HMRC, the first case to look in detail at the salaried member rules.