Charles Tyrwhitt LLP v HMRC

In Charles Tyrwhitt LLP v HMRC [2021] UKUT 165 (TCC) (12 July 2021) the UT upheld the decision of the FTT that bonus payments made to five members of the LLP constituted remuneration for employment (and therefore subject to class 1 NICs). This was because the bonuses were paid in respect of earlier periods when the individuals were employees of the LLP even though they became members of the LLP before the conditions for the making of the payments were met and the payments themselves were made.

Bonus payments had been paid under a ‘long term incentive plan’ to five individuals who were members of a limited liability partnership. The plan provided for bonuses based on profits. The individuals were admitted to the plan at a time when they were employees of the LLP. They later became members of the LLP and each of them subsequently received a...