Schedule 1: Employment Allowance: rules for determining if persons are connected Section 14: Limited Liability Partnerships
146.Subsection (1) and (2) insert a new section 4AA into the SSCBA 1992 that gives the Treasury, with the concurrence of the Secretary of State, the power to provide, that in prescribed circumstances a person (“E”) is to be treated as employed in employed earner’s employment by a LLP, that the LLP is to be treated as the secondary contributor in relation to E’s earnings from the LLP and that payments of a prescribed description are to be treated as earnings of E paid at prescribed times from E’s employment with the LLP.
147.New section 4AA also creates a power to modify the definition of employee and employer in Parts 11 to 12ZB so that E is an employee and the LLP is the employer for the purposes of the legislation governing statutory sick, maternity, paternity and adoption payments. The power in section 4AA is expressly not limited by section 4(4) of the LLP Act 2000 and can be exercised to make amendments to the SSCBA that the Treasury considers are necessary to assimilate the law relating to income tax and the law relating to contributions as a result of a provision of the Income Tax Acts relating to LLPs or LLP members being passed.
148.Subsection (3) inserts a new paragraph (d) to subsection (3) of section 4B of the SSCBA 1992 which makes new section 4AA a relevant power for the purposes of section 4B. The effect of this is that regulations under the power in section 4AA can have retrospective effect where they are made to reflect retrospective tax legislation.
149.Subsection (4) inserts a new subsection (11) into section 10 of the SSCBA 1992 which gives the Treasury the power to modify the law relating to Class 1A contributions in the case of an employed earner’s employment which is treated as existing by virtue of regulations made under new section 4AA.
150.Subsections (5) to (8) make equivalent amendments for Northern Ireland inserting in the SSCB(NI)A 1992 a new section 4AA, paragraph (d) to subsection (3) of section 4B and subsection (11) to section 10.