NIM24522 - Class 4 NICs: who is liable: sleeping partners - background
Social Security Contributions and 51²è¹Ý Act 1992 Section 2(1)(b) and Section 15
Prior to its revised interpretation of the law HMRC did not regard sleeping partners as being liable for Class 2 or Class 4 NICs. These partners were not regarded as gainfully employed as required under section 2(1)(b) of SSCBA 1992 and were therefore, not liable to pay Class 2 NICs. HMRC considered that the profits of sleeping partners did not derive immediately from the trade, profession or vocation and were therefore not liable to Class 4 NICs under section 15 of SSCBA 1992.