
2014 No. 3159
Social Security
The Social Security Contributions (Limited Liability Partnership) Regulations 2014
Made 4th December 2014
Coming into force 5th December 2014
The Treasury make the following Regulations in exercise of the powers conferred by sections 4AA and 175(3) and (4) of the Social Security Contributions and Benefits Act 1992 , 4AA and 171(3) and (4) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992  and, as it appears to the Treasury to be expedient for these Regulations to have retrospective effect in consequence of retrospective tax provisions, namely sections 863A to 863G of the Income Tax (Trading and Other Income) Act 2005 , by section 4B  of those Acts.Accordingly, the Treasury, with the concurrence of the Secretary of State and the Department for Social Development  in so far as required, make the following Regulations:A draft of this instrument has been laid before each House of Parliament in accordance with section 176(1) of the Social Security Contributions and Benefits Act 1992  and section 172(11A) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992  and approved by resolution of each House.
Citation, commencement, effect and extent
1 

(1) These Regulations may be cited as the Social Security Contributions (Limited Liability Partnership) Regulations 2014.
(2) These Regulations come into force on the day after the day on which they are made, and have effect for the tax year 2014–15 and subsequent tax years.
(2A) Regulations 2A, 2B and 2C have effect for the tax year 2015-16 and subsequent tax years.
(3) Regulations 2B, 3 and 6 extend only to England and Wales and to Scotland and regulations 2C, 4 and 7 extend only to Northern Ireland.
Interpretation
2 
In these Regulations—
 “employment income” has the meaning given by section 7 of ITEPA 2003 ;
 “ITTOIA 2005” means the Income Tax (Trading and Other Income) Act 2005;
 “LLP” means limited liability partnership;
 “SSCBA 1992” means the Social Security Contributions and Benefits Act 1992; and
 “SSCB(NI)A 1992” means the Social Security Contributions and Benefits (Northern Ireland) Act 1992.
Members of LLPs: employment
2A 

(1) The modification in paragraph (2) applies to—
(a) Part 1 and so much of Part 6 of SSCBA 1992 as relates to contributions, and
(b) Part 1 and so much of Part 6 of SSCB(NI)A 1992 as relates to contributions.
(2) The modification is that “employment” includes membership of an LLP which carries on a trade, profession or business with a view to profit.
Members of LLPs: Great Britain
2B. 
A person in employment in Great Britain as a member of an LLP which carries on a trade, profession or business with a view to profit is, unless regulation 3 applies, to be treated as a self-employed earner for the purposes of SSCBA 1992.
Members of LLPs: Northern Ireland
2C. 
A person in employment in Northern Ireland as a member of an LLP which carries on a trade, profession or business with a view to profit is, unless regulation 4 applies, to be treated as a self-employed earner for the purposes of SSCB(NI)A 1992.
Salaried Members of LLPs: Great Britain
3 

(1) This regulation applies where—
(a) for the purposes of the Income Tax Acts an individual is treated by section 863A of ITTOIA 2005 (limited liability partnerships: salaried members) as being employed by an LLP under a contract of service, including where that is the case by virtue of section 863G of ITTOIA 2005 (anti-avoidance), (“the deemed tax employment”); and
(b) if the services performed, or to be performed, by the individual as a member of the LLP in the relevant period (as defined in section 863B(3) of ITTOIA 2005) were actually performed (or to be performed) under a contract of service with the LLP, the employment under that contract of service would be employment in Great Britain.
(2) For the purposes of SSCBA 1992—
(a) the individual (“the Salaried Member”) is to be treated as employed in employed earner's employment by the LLP (being the deemed tax employment);
(b) any amount treated by virtue of section 863A or 863G(4) of ITTOIA 2005 as employment income from the deemed tax employment, other than employment income under Chapters 2 to 11 of Part 3 of ITEPA 2003 (the benefits code), is to be treated as an amount of earnings paid to or for the benefit of the Salaried Member in respect of the Salaried Member's employed earner's employment with the LLP;
(c) the secondary contributor  in relation to those earnings is the LLP; and
(d) in the case of an amount of earnings which is an amount of employment income by virtue of section 863G(4) of ITTOIA 2005, the earnings are to be treated as being paid by the LLP to the Salaried Member when the amount mentioned in section 863G(2)(d) of that Act arises.
(3) The reference in paragraph (1)(b) to services performed (or to be performed) by the individual as a member of the LLP includes services personally performed by the individual for the LLP under arrangements by virtue of which section 863G(4) of ITTOIA 2005 applies.
(4) The definitions of  “employer” and  “employee” in—
(a) section 163 (interpretation of Part 11 and supplementary provisions) ;
(b) section 171 (interpretation of Part 12 and supplementary provisions) ;
(c) section 171ZJ (Part 12ZA: supplementary) ; and
(d) section 171ZS (Part 12ZB: supplementary) 
of the SSCBA 1992 have effect as if the Salaried Member were gainfully employed in Great Britain by the LLP under a contract of service with the earnings mentioned in paragraph (2)(b).
Salaried Members of LLPs: Northern Ireland
4 

(1) This regulation applies where—
(a) for the purposes of the Income Tax Acts an individual is treated by section 863A of ITTOIA 2005 (limited liability partnerships: salaried members) as being employed by an LLP under a contract of service, including where that is the case by virtue of section 863G of ITTOIA 2005 (anti-avoidance), (“the deemed tax employment”); and
(b) if the services performed, or to be performed, by the individual as a member of the LLP in the relevant period (as defined in section 863B(3) of ITTOIA 2005) were actually performed (or to be performed) under a contract of service, the employment under that contract of service would be employment in Northern Ireland.
(2) For the purposes of SSCB(NI)A 1992—
(a) the individual (“the Salaried Member”) is to be treated as employed in employed earner's employment by the LLP (being the deemed tax employment);
(b) any amount treated as employment income by virtue of section 863A or section 863G(4) of ITTOIA 2005 as employment income from the deemed tax employment, other than employment income under Chapters 2 to 11 of Part 3 of ITEPA 2003 (the benefits code), is to be treated as an amount of earnings paid to or for the benefit of the Salaried Member in respect of the Salaried Member's employed earner's employment with the LLP;
(c) the secondary contributor  in relation to those earnings is the LLP; and
(d) in the case of an amount of earnings which is an amount of employment income by virtue of section 863G(4) of ITTOIA 2005, the earnings are to be treated as being paid by the LLP to the Salaried Member when the amount mentioned in section 863G(2)(d) of that Act arises.
(3) The reference in paragraph (1)(b) to services performed by the individual as a member of the LLP includes services personally performed by the individual for the LLP under arrangements by virtue of which section 863G(4) of ITTOIA 2005 applies.
(4) The definitions of  “employer” and  “employee” in—
(a) section 159 (interpretation of Part 11 and supplementary provisions) ;
(b) section 167 (interpretation of Part 12, etc.) ;
(c) section 167ZJ (Part 12ZA: supplementary) ; and
(d) section 167ZS (Part 12ZB: supplementary) 
of SSCB(NI)A 1992 have effect as if the Salaried Member were gainfully employed in Northern Ireland by the LLP under a contract of service with the earnings mentioned in sub- paragraph (2)(b).
Consequential amendment to the Social Security (Contributions) Regulations 2001
5 

(1) The Social Security (Contributions) Regulations 2001  are amended as follows.
(2) After regulation 40 (prescribed general earnings in respect of which Class 1A contributions not payable) insert—“
Exception from liability to pay Class 1A contributions in respect of an amount representing an amount on which Class 1 or Class 1A contributions have already been paid pursuant to the Social Security Contributions (Limited Liability Partnership) Regulations 2014
40A 
Class 1A contributions shall not be payable in respect of a benefit in kind provided by an employer to an employed earner which represents an amount on which Class 1 or Class 1A contributions are payable by a limited liability partnership in respect of that earner by virtue of regulation 3 or 4 of the Social Security Contributions (Limited Liability Partnership) Regulations 2014 .”.
(3) In Part 10 of Schedule 3 after paragraph 24 insert—“
Payments on which Class 1 or Class 1A contributions have been paid pursuant to the Social Security Contributions (Limited Liability Partnership) Regulations 2014
25 
A payment made by an employer to an employed earner which represents an amount on which Class 1 or Class 1A contributions are payable by a limited liability partnership in respect of that earner by virtue of regulation 3 or 4 of the Social Security Contributions (Limited Liability Partnership) Regulations 2014.”.
Consequential amendments to the Social Security Contributions (Intermediaries) Regulations 2000
6 

(1) The Social Security Contributions (Intermediaries) Regulations 2000  are amended as follows.
(2) In regulation 7(1) (worker's attributable earnings - calculation)—
(a) in  “Step One” after  “arrangements” insert “
                    but excluding amounts on which Class 1 or Class 1A contributions are payable by virtue of regulation 3 or 4 of the Social Security Contributions (Limited Liability Partnership) Regulations 2014 
                  ”; and
(b) in “Step Seven”in sub-paragraph (a) after  “Three” insert “
                    and payments within paragraph 25 of Part 10 of Schedule 3  to the Contributions Regulations
                  ”
                  .
Consequential amendments to the Social Security Contributions (Intermediaries) (Northern Ireland) Regulations 2000
7 

(1) The Social Security Contributions (Intermediaries) (Northern Ireland) Regulations 2000  are amended as follows.
(2) In regulation 7(1) (worker's attributable earnings - calculation)—
(a) in  “Step One” after  “arrangements” insert “
                    but excluding amounts on which Class 1 or Class 1A contributions are payable by virtue of regulation 3 or 4 of the Social Security Contributions (Limited Liability Partnership) Regulations 2014 
                  ”; and
(b) in  “Step Seven”in sub-paragraph (a) after  “Three” insert “
                    and payments within paragraph 25 of Part 10 of Schedule 3  to the Contributions Regulations
                  ”
                  .
David Evennett
Alun Cairns

Two of the Lords Commissioners of Her Majesty's Treasury
The Secretary of State concurs.Signed by authority of the Secretary of State for Work and Pensions
Steve Webb

Minister of State

Department for Work and Pensions
The Department for Social Development concurs.Sealed with the Official Seal of the Department for Social Development on 1st December 2014
Anne McCleary

A senior officer of the
Department for Social Development
