The Supreme Court has handed down judgment in BlueCrest Capital Management (UK) LLP v HMRC [2026] UKSC 18.
The case was concerned with whether certain members of an investment management LLP were to be taxed as employees or as partners under the ‘salaried members’ rules.
The court upheld and developed the Court of Appeal’s decision that Condition B of the salaried members rules is concerned with influence over the affairs of the partnership as a whole, generally at a strategic rather than operational level. It is not concerned with members’ activities (contrary to the FTT’s view that partners are distinguished by ‘finding, minding and grinding’). This reflects the distinction at common law between a partner and an employee, on which Parliament had drawn in enacting the salaried members rules.
The court also upheld the decision of the courts below that the relevant members met Condition A. Their remuneration was varied without reference to the LLP’s profits (and the fact that the profits ultimately functioned as a potential cap on the amount of their remuneration was not enough to take it outside Condition A).
BlueCrest’s appeal to the Supreme Court was therefore dismissed and the matter will now be remitted to the FTT to reconsider its findings on Condition B in light of the Supreme Court’s ruling.
James Kirby (led by Richard Vallat KC and Laura Poots KC) made oral submissions for HMRC on issues of partnership law in the appeals.
The judgment is available here:
https://supremecourt.uk/cases/uksc-2025-0028.
The appeal has made front-page news in the Financial Times and the business sections of other newspapers.
