UK Supreme Court Upholds Tax Ruling Against Hedge Fund in £200 Million Case

The UK Supreme Court unanimously dismissed an appeal by a hedge fund management firm over how payouts to its traders should be taxed. The ruling upheld the position of UK tax authorities that most payments to members of the limited liability partnership were disguised salary rather than profit shares.

The case centered on legislation determining whether limited liability partnership members should be treated as partners or employees for income tax and national insurance purposes. The court found the payments were not based solely on the partnership's profits or losses.

The firm stated after the decision that it believes the tax authority's published guidance was wrong. In a statement, the firm said businesses need certainty from tax guidance to organize their affairs and that without it the UK is no longer a serious contender as a jurisdiction in which to do business.

A tax authority spokesperson welcomed the ruling and said the agency will consider whether to update its guidance.