381LLPs subject to the small LLPs regime

The small LLPs regime applies to an LLP for a financial year in relation to which the LLP—

a

qualifies as small (see sections 382 and 383), and

b

is not excluded from the regime (see section 384).

382LLPs qualifying as small: general

1

An LLP qualifies as small in relation to its first financial year if the qualifying conditions are met in that year.

F121A

Subject to subsection (2), an LLP qualifies as small in relation to a subsequent financial year if the qualifying conditions are met in that year.

F92

In relation to a subsequent financial year, where on its balance sheet date an LLP meets or ceases to meet the qualifying conditions, that affects its qualification as a small LLP only if it occurs in two consecutive financial years.

3

The qualifying conditions are met by an LLP in a year in which it satisfies two or more of the following requirements—

1.	Turnover	F11Not more than £10.2 million
2.	Balance sheet total	F17Not more than £5.1 million
3.	Number of employees	Not more than 50

4

For a period that is an LLP's financial year but not in fact a year the maximum figures for turnover must be proportionately adjusted.

5

The balance sheet total means the aggregate of the amounts shown as assets in the LLP's balance sheet.

6

The number of employees means the average number of persons employed by the LLP in the year, determined as follows—

a

find for each month in the financial year the number of persons employed under contracts of service by the LLP in that month (whether throughout the month or not),

b

add together the monthly totals, and

c

divide by the number of months in the financial year.

7

This section is subject to section 383 (LLPs qualifying as small: parent LLPs).

383LLPs qualifying as small: parent LLPs

1

A parent LLP qualifies as a small LLP in relation to a financial year only if the group headed by it qualifies as a small group.

2

A group qualifies as small in relation to the parent LLP's first financial year if the qualifying conditions are met in that year.

F32A

Subject to subsection (3), a group qualifies as small in relation to a subsequent financial year of the parent LLP if the qualifying conditions are met in that year.

F203

In relation to a subsequent financial year of the parent LLP, where on the parent LLP’s balance sheet date the group meets or ceases to meet the qualifying conditions, that affects the group’s qualification as a small group only if it occurs in two consecutive financial years.

4

The qualifying conditions are met by a group in a year in which it satisfies two or more of the following requirements—

1.	Aggregate turnover	F8Not more than £10.2 million net (or £12.2 million gross)
2.	Aggregate balance sheet total	F5Not more than £5.1 million net (or £6.1 million gross)
3.	Aggregate number of employees	Not more than 50

5

The aggregate figures are ascertained by aggregating the relevant figures determined in accordance with section 382 for each member of the group.

6

In relation to the aggregate figures for turnover and balance sheet total—

• “net” means after any set-offs and other adjustments made to eliminate group transactions—

  1. a

     in the case of non-IAS accounts in accordance with Part 1 of Schedule 4 to the Small Limited Liability Partnerships (Accounts) Regulations 2008 (S.I. 2008/1912) or Schedule 3 to the Large and Medium-sized Limited Liability Partnerships (Accounts) Regulations 2008 (S.I. 2008/1913),

  2. b

     in the case of IAS accounts, in accordance with F19UK-adopted international accounting standards; and

• “gross” means without those set-offs and other adjustments.

An LLP may satisfy any relevant requirement on the basis of either the net or the gross figure.

7

The figures for each subsidiary undertaking shall be those included in its individual accounts for the relevant financial year, that is—

a

if its financial year ends with that of the parent LLP, that financial year, and

b

if not, its financial year ending last before the end of the financial year of the parent LLP.

If those figures cannot be obtained without disproportionate expense or undue delay, the latest available figures shall be taken.

384LLPs excluded from the small LLPs regime

1

The small LLPs regime does not apply to an LLP that F15... was at any time within the financial year to which the accounts relate—

F18a

a traded LLP,

b

an LLP that—

i

is an authorised insurance company, a banking LLP, an e-money issuer, a MiFID investment firm or a UCITS management company, F13or

ii

carries on insurance market activity, or

F16iii

is a scheme funder of a Master Trust scheme within the meanings given by section 39(1) of the Pension Schemes Act 2017 F22or section 39(1) of the Pension Schemes Act (Northern Ireland) 2021 (interpretation of Part 1), or

c

a member of an ineligible group.

2

A group is ineligible if any of its members is—

F2a

a traded company,

b

a body corporate (other than a company) whose shares are admitted to trading on a F4UK regulated market,

c

a person (other than a small company or small LLP) who has permission under F23Part 4A of the Financial Services and Markets Act 2000 (c.8) to carry on a regulated activity,

F1ca

an e-money issuer,

d

a small company or small LLP that is an authorised insurance company, a banking company or banking LLP, F21... a MiFID investment firm or a UCITS management company, F6or

e

a person who carries on insurance market activity, F10or

F14f

a scheme funder of a Master Trust scheme within the meanings given by section 39(1) of the Pension Schemes Act 2017 F7or section 39(1) of the Pension Schemes Act (Northern Ireland) 2021 (interpretation of Part 1).

3

A company or LLP is a small company or small LLP for the purposes of subsection (2) if it qualified as small in relation to its last financial year ending on or before the end of the financial year to which the accounts relate.