Income Tax (Trading and Other Income) Act 2005 section 863C

Condition B

Section 863C sets out Condition B, one of the conditions used to determine whether a member of a limited liability partnership (LLP) should be treated as an employee rather than a self-employed partner for tax purposes. This condition focuses on whether the member lacks significant influence over the partnership's affairs.

• Condition B examines whether member M has significant influence over the affairs of the LLP.
• The test looks at the mutual rights and duties between the members of the LLP, and between the partnership and its members.
• If those rights and duties do not give M significant influence over the partnership's affairs, Condition B is met.
• Meeting this condition (alongside the other conditions) may result in M being treated as an employee for income tax purposes rather than as a self-employed partner.