Post HMRC Changes, How Many Employees Does An LLP Have?

David Israel, partner and head of employment comments on "HMRC's changes to the tax treatment of members could raise serious employment law issues."

HMRC's new tax regime is up and running, with the changes (as they say) making "... the tax system fairer by ensuring that employment taxes are paid by LLP members who are essentially employee". 

Those in the firing line are fixed-share members.  A failure to satisfy the new test will mean that, for tax purposes, the member will be treated as an employee.  It does not though touch upon their membership of the LLP nor their employment status.   

Firms are typically seeking to address the new test by requiring these members to contribute the equivalent of 25 per cent or more of their fixed share as capital.