Fixed Share Partners - Employment Status Clarified

Pamela Sayers looks at a recent case concerning whether a partner had employment or partner status for tax purposes.

A recent case heard in the Employment Appeal Tribunal (EAT), which upheld the decision of the Employment Tribunal, has provided welcome relief for LLPs with fixed share equity partners.

In Tiffin v Lester Aldridge LLP, Tiffin who, although a fixed share equity partner, considered himself to be an employee rather than self-employed and wanted to seek compensation for unfair dismissal. The EAT dismissed the case, satisfying LLPs that individuals who enter into members' agreements cannot seek claims in employment tribunals.

However, partnership agreements should be reviewed as the EAT considered Tiffin to be a partner because he: