What is a salaried member of an LLP

by Aitch, posted in Business

The salaried member legislation applies to certain members of a Limited Liability Partnership (LLP) whose terms of membership are more like an employee than a partner. To be a salaried member, the individual must perform services for the LLP in their capacity as a member.

The legislation uses a three-part test. If all three conditions apply, the member is classified as a salaried member for tax purposes:

  • Condition A – Disguised salary: At least 80% of the member’s pay is fixed, or any variable amounts do not vary in line with the LLP’s overall profits or losses.
  • Condition B – Lack of influence: The member has no significant influence over the LLP’s affairs.
  • Condition C – Insufficient capital stake: The member’s capital contribution is less than 25% of their expected reward package.

If a member can show that at least one condition does not apply, they continue to be treated as a partner.

The rules do not apply to:

  • Companies
  • Individuals who do no more than invest money
  • Individuals who no longer provide services for the LLP but continue to receive a profit share

HMRC examples illustrate that remuneration linked to overall firm profits, rather than individual performance, does not create a salaried member situation. Professional qualifications or experience are also irrelevant, what counts is the member’s role and risk exposure in the LLP.

Source:HM Revenue & Customs | 02-02-2026
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Aitch
I'm Aitch, the Founder and CEO of CIGMA Accounting Ltd. As a Chartered Management Accountant and as a CIMA member, I've spent more than 16 years helping businesses, entrepreneurs, landlords, and individuals with tax planning, accounting, and HMRC compliance. As a chartered accountant in London, I'm passionate about making complex tax matters easier to understand and helping clients make confident financial decisions. Over the years, I've advised start-ups, SMEs, established companies, and high-net-worth individuals across a wide range of tax and accounting matters. My expertise includes Corporation Tax, Self-Assessment, Capital Gains Tax, Inheritance Tax planning, R&D tax relief, capital allowances, international tax, and resolving complex HMRC compliance issues. Whether clients need a business accountant, tax accountant, or strategic tax advisor, my focus is always on delivering practical advice that creates long-term value. One of my specialist areas is Making Tax Digital (MTD). I've worked extensively with businesses preparing HMRC's digital reporting requirements, helping them move to cloud accounting, improve financial processes, and adopt technology that makes compliance more efficient. I regularly speak at Making Tax Digital roadshows, industry events, and educational sessions in collaboration with Zoho Books, sharing practical insights into digital accounting, tax legislation, and the future of the profession. Many business owners looking for the best accounting firm in London are not simply searching for an accountant they're looking for trusted advice, responsive support, and long-term value. That's the approach I've taken in building CIGMA Accounting. My team and I work closely with businesses across London and the UK, providing accounting services, tax advisory, bookkeeping, payroll, VAT, company accounts, and strategic tax planning tailored to each client's goals. Through this website, I share practical guidance on UK taxation, Making Tax Digital, HMRC updates, Corporation Tax, Self-Assessment, and business finance. My aim is to provide reliable, straightforward information that helps business owners understand changing regulations, reduce compliance risks, and make informed financial decisions with confidence.
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