From 6 April 2015 inactive members of limited liability partnerships (LLPs) are liable for Class 2 NICs.

LLP members are treated the same for NICs purposes as sleeping partners and inactive limited partners. Liability for Class 2 NICs was also changed so that it is no longer a determining factor in deciding whether individuals operate through an LLP or a partnership.

Under regulations introduced on 9 March 2015 the meaning of “employment” for the purposes of Parts 1 and 6 of the Social Security Contributions and Benefits Act 1992, is amended to include membership of an LLP carrying on a trade, profession or business with a view to a profit. An LLP member is henceforth automatically treated as self employed. There is an exception, and this is in cases where the LLP salaried member rules apply. In those cases the member is treated as an employee for both tax and NICs.

See The Social Security regulations