On 9 March 2015, regulations were made to ensure that inactive members of limited liability partnerships (LLPs) are liable for Class 2 NICs in the same way as sleeping partners and inactive limited partners.

The regulations also ensure that liability for Class 2 NICs is not a determining factor in deciding whether individuals operate through an LLP, or a partnership. The regulations come into force on 6 April 2015 and have effect for the tax year 2015-16, and subsequent tax years.

The regulations modify the meaning of “employment” for the purposes of Parts 1 and 6 of the Social Security Contributions and Benefits Act 1992, to include membership of an LLP carrying on a trade, profession or business with a view to a profit. Such a person is to be treated as self- employed unless the NICs LLP salaried member rules apply to them.

To read the regulations click here.