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‘Salaried members’ rules did not apply to certain hedge fund investment portfolio managers and others

By Mark McLaughlin, November 2023

Members of an LLP who were investment portfolio managers had significant influence over the affairs of the LLP such that the ‘salaried members’ anti-avoidance legislation did not apply to them, but those provisions applied to certain other LLP members. 

The respondent limited liability partnership (LLP) provided investment management services to the group’s funds and back-office services to other group entities. HM Revenue and Customs (HMRC) issued PAYE determinations and a decision that the respondent was liable to Class 1 National Insurance contributions for 2014/15 to 2018/19 on the basis that the ‘salaried members’ anti-avoidance provisions (ITTOIA 2005, ss 863A-863G; SSCBA 1992, s 4 and SI 2014/3159, reg 3) applied to certain LLP members. The respondent appealed.  

The issue for the First-tier Tribunal (FTT) was whether Conditions A and B of the salaried members rules were satisfied. If either of those

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