SolvedNIM24522 | Class 4 NICs: who is liable: sleeping partners - background
From HM Revenue & Customs · National Insurance Manual
Social Security Contributions and Benefits 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.