21/07/2026
If your business operates as a Limited Liability Partnership (LLP), a recent UK Supreme Court ruling could have important tax implications.
The Court has confirmed that only legally enforceable rights set out in an LLP agreement count when deciding whether a member has significant influence over the business.
This means that experience, seniority, or informal decision-making alone will not satisfy the test.
Why is this important?
If an LLP member meets all three salaried member conditions, they may be treated as an employee for Income Tax and National Insurance purposes rather than as self-employed.
The three key tests are:
✔️ Most of the member's income is disguised salary
✔️ They do not have significant legally enforceable influence over the LLP
✔️ Their capital contribution is less than 25% of their disguised salary
This ruling could affect professional practices, investment firms, and many other LLPs, making it a good time to review your LLP agreement and member arrangements.
Book your FREE consultation with Zaidi & Co to ensure your LLP structure remains tax-efficient and compliant.
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