Commissioners for His Majesty’s Revenue and Customs (Respondent) v BlueCrest Capital Management (UK) LLP (Appellant)

Case summary

Case ID

UKSC/2025/0028

Parties

Appellant(s)

Bluecrest Capital Management (UK) LLP

Respondent(s)

The Commissioners for HM Revenue and Customs

Issue

Are certain members of BlueCrest LLP to be treated as employees for tax purposes?

Facts

The Salaried Members Rules (found in the Income Tax (Trading and Other Income) Act 2005) seek to identify cases of ‘disguised employment’ in Limited Liability Partnerships (“LLPs”). Under the Rules, members of an LLP are treated as employees for tax purposes if three conditions (A to C) are met. This appeal concerns the meaning of Conditions A and B. Condition A is that the member is rewarded for their services through a ‘disguised salary’ that is fixed or varied without reference to the profits or losses of the LLP. Condition B is that the member does not have significant influence over the affairs of the LLP. BlueCrest is an LLP that provides investment management and back-office services. It has various individual members, some of whom are fund managers or traders (portfolio managers) and others who carry out other functions (non-portfolio managers). BlueCrest argued that a number of its members should not be taxed as employees and HMRC sought to invoke the Salaried Members Rules to claim that they should be. The First-tier Tribunal found that all the relevant members met Condition A. Portfolio managers with capital allocations of $100million and the desk heads had significant influence over BlueCrest’s affairs so did not meet Condition B, but the other portfolio managers and the non-portfolio managers did not have such influence and so met Condition B. The Upper Tribunal upheld this. The Court of Appeal overturned the decisions of the First-tier Tribunal and Upper Tribunal and remitted the case to the First-tier Tribunal. BlueCrest now appeals to the Supreme Court.

Date of issue

14 February 2025

Case origin

PTA

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