Firms welcome clarification of fixed-share status by CoA

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  • It does of course mean that no one in their right mind will agree to become a fixed share partner. They get nothing but a few measly points and, in exchange, surrender all employment rights.
    Having said that, given the changes rippling through the market, fewer people hankering after partnership is inevitable anyway. Some offered recently have declined and more will do so.

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  • the key feature in my case was whether as a member of a LLP I was also employee of the LLP. A bit like a shareholder in a company also being an employee of that company. There is no reason why you can not be both a member of a LLP and its employee. This is not possible in a partnership where you can not be both a partner and an employee. As a member of a LLP you are automatically treated as self employed for tax purposes( see HMRC Guidance on the subject). If offered the chance to become a member of a LLP just make it clear in the LLP agreement with the other members that you are for employment purposes to be classed as an employee.That way you have the benefit of the tax treatment of being self employed and employee rights and the LLP saves 1 Employer NI on your salary/earnings which you can use as a bargaining chip in your renumeration discussions.

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  • This is an interesting case the full judgement can be read here - http://www.bailii.org/ew/cases/EWCA/Civ/2012/35.html

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