Partners at limited liability partnership law firms will have to comply with one of three tests in order to satisfy the tax authorities they should not be treated as employees, new guidance shows.
HMRC and the Treasury are concerned that limited liability partnership structures allow “disguised employment” to take place, whereby people who are ostensibly partners in fact have a guaranteed income and little decision-making power. The worry for the government is that the well-established arrangement gives rise to tax discrepancies.
