Billionaire hedge fund manager Michael Platt has suffered a major legal and financial setback after his firm BlueCrest Capital Management lost a Supreme Court battle with HM Revenue & Customs, leaving it facing a tax bill of nearly £200m.
The ruling is a significant victory for HM Revenue & Customs, which argued that payments made to members of the firm’s partnership structure should be treated as employment income rather than profit distributions.
The Supreme Court unanimously agreed, concluding that the remuneration structure amounted to “disguised salary” and therefore should be subject to income tax and National Insurance.
The judgment means BlueCrest is liable for around £143m in income tax and more than £55m in National Insurance contributions, following a dispute dating back to 2022.
At the centre of the case was whether payments to partners in the firm’s limited liability partnership were genuinely profit-linked or effectively fixed remuneration tied to performance.
Judges found that most of the payments were not determined solely by overall partnership profits and therefore could not be treated as traditional partnership distributions.
Following the ruling, BlueCrest criticised the UK’s tax regime, arguing the decision undermines confidence in Britain as a destination for global investment management.
The firm said businesses need “certainty” in HMRC guidance to structure their affairs and warned that the UK was “no longer a serious contender” as a jurisdiction for doing business without greater predictability.
The comments are likely to reignite debate over the UK’s competitiveness as a global financial centre, particularly among hedge funds and alternative asset managers.
The decision is expected to be closely scrutinised across the industry, where similar partnership structures are widely used.
Industry figures warned the ruling could have wider implications for firms facing ongoing scrutiny over how partners and traders are taxed.
It follows another recent Supreme Court defeat for a London hedge fund, raising concerns that HMRC is taking a tougher stance on complex remuneration structures.
Michael Platt, one of Britain’s wealthiest financiers with an estimated fortune of over £11bn, founded BlueCrest in 2000.
The firm has delivered strong performance in recent years, but the tax ruling represents a reputational and financial setback at a sensitive time for the sector.
The case adds to growing concerns within the City of London about regulatory and tax certainty, with industry groups warning that legal unpredictability could deter international capital.
With HMRC also pursuing other hedge fund investigations, the ruling is likely to reinforce pressure on policymakers to clarify how high-value financial partnerships are taxed in the UK.
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