Key facts
- Bluecrest Capital Management has lost a Supreme Court appeal regarding a £200 million tax dispute with HMRC.
- The ruling determined that senior traders in a Limited Liability Partnership (LLP) should be taxed as employees, not self-employed profit-sharers.
- The case centered on 'salaried member' rules for LLPs, which include many professional services firms.
- HMRC sought to collect income tax and national insurance contributions from Bluecrest for the tax years 2014/15 to 2018/19.
- Michael Platt, founder of Bluecrest, is the UK's wealthiest financier.
Hedge fund Bluecrest Capital Management, founded by billionaire Michael Platt, has lost a significant tax battle with the UK's HM Revenue & Customs (HMRC). The Supreme Court unanimously ruled against the firm, determining that its senior traders, operating within a Limited Liability Partnership (LLP), should be classified as employees for tax purposes rather than self-employed profit-sharers.
The ruling stems from a dispute initiated by HMRC after auditing Bluecrest for the tax years 2014/15 to 2018/19. HMRC argued that most Bluecrest members were 'salaried members' and thus subject to income tax and National Insurance contributions. The case centered on 'salaried member' rules, which are crucial for determining the tax status of LLPs, common in the professional services sector.
Bluecrest's argument that its traders were self-employed was rejected by the Supreme Court. This decision could lead to a tax bill of approximately £200 million for the hedge fund and may have broader implications for other firms in the professional services industry, potentially exposing them to similar tax liabilities.