3 July 2026
The Supreme Court has unanimously dismissed the taxpayer’s appeal in the LLP ‘salaried members’ legislation case HMRC v BlueCrest Capital Management (UK) LLP. The case concerns the rules which, if three statutory conditions are all met, can lead to certain individual members of an LLP being treated for income tax and NIC purposes as employees receiving employment income, rather than as self-employed partners.
The judgment focuses on ‘Condition B’, which tests whether the relevant “mutual rights and duties” of the members and the LLP gave individuals “significant influence over the affairs of the partnership.” The Supreme Court agreed with the Court of Appeal’s judgment of 2025 that the lower Tribunals had misinterpreted the condition. The Supreme Court holds that Condition B is concerned with the mutual legally enforceable rights and duties of the members and of the LLP, i.e. those derived from the contractual and statutory framework for the LLP (such as the LLP agreement, or delegated authority traceable back to it). Informal or de facto influence over the affairs of the LLP derived from members’ performance is not relevant in testing whether influence is ‘qualifying’. The Court also provided guidance on the interpretation of “significant”, “influence”, and “the affairs” of the LLP. The case has been remitted to the First-tier Tribunal to reconsider the application of Condition B based on the guidance on the law provided. The Supreme Court also dismissed an argument raised in relation to ‘Condition A’, which concerns the extent to which amounts received by the members were fixed or variable by reference to the LLP’s overall profits.
For further details, please see our alert.
The Taxation (Energy and Vehicles) Bill completed its House of Commons Second Reading, Committee Stage and Third Reading on Wednesday 1 July 2026. The Bill includes legislation to enact the increase, announced in April, to the Electricity Generator Levy (EGL) rate from 45% to 55% with effect from 1 July 2026. The Bill also includes legislation for two vehicle-taxation changes announced in May in relation to approved mileage allowance rates for 2026/27, and a temporary vehicle excise duty exemption for certain heavy goods vehicles. The Bill was not amended by MPs. The Bill has now moved to the House of Lords and is expected to complete its remaining Lords stages on 14 July 2026.
HMRC have published new guidance, expanding and renaming their ‘Profit Diversion Compliance Facility’ (PDCF) as the ‘Transfer Pricing and Profit Diversion Compliance Facility’ (TP&PDCF). The facility was introduced in 2019 to provide an opportunity for businesses within the scope of Diverted Profits Tax (DPT) to bring their UK tax affairs up to date by making a disclosure to HMRC. The updated facility reflects the withdrawal of DPT by Finance Act 2026, and the introduction of replacement Unassessed Transfer Pricing Profits (UTPP) rules, with effect from 1 January 2026. It also broadens the scope of the original facility to include all significant non-financial transfer pricing risks. For further detail, please see our alert. (Contact: Jamie Bedford, Samir Yahiaoui, or Iain Whittle)
The Court of Appeal has unanimously dismissed the substantive appeals of the taxpayers in the joined cases Trustees of the Panico Panayi Accumulation and Maintenance Settlements & Redevco Properties UK1 Ltd. The cases concerned how to resolve historical incompatibilities between UK capital gains tax and corporation tax law with EU law, in relation to exit charges arising on the deemed disposal of assets when trustees (in Panayi) or companies (in Redevco) migrated their tax residence from the UK to an EEA state. The migrations in both cases occurred prior to the UK’s departure from the EU, and prior to amendments that subsequently enacted a statutory right to pay UK-EEA exit charge tax over five years.
In both cases, the First-tier and Upper Tribunals agreed with HMRC that, instead of disapplying the exit charge provisions entirely, a ‘conforming interpretation’ should be adopted to remedy the incompatibility. They held that the legislation, as it stood at the time, should be read as if it already included an option to defer UK-EEA exit charge payments over five equal annual instalments. The Court of Appeal has now endorsed the earlier decisions, finding that the conforming interpretation “goes with the grain” of the legislation and did not represent impermissible judicial lawmaking.
Next Generation Clubs Limited, trading under the David Lloyd brand (and Harbour Club), operates leisure and recreational sites. The First-tier Tribunal (FTT) has held that the reduced VAT rate that applied to the right of admission to certain attractions during the COVID-19 pandemic did not apply to membership subscriptions charged by David Lloyd. As per Group 16, Schedule 7A, Value Added Tax Act 1994, the reduced rate applied to supplies “of a right of admission to shows, theatres, circuses, fairs, amusement parks, concerts, museums, zoos, cinemas and exhibitions and similar cultural events and facilities” from 15 July 2020 to 31 March 2022. The issue was whether the services supplied by David Lloyd were rights of admission to “similar cultural events and facilities”.
It was common ground that the supplies were not of events, and did not fall directly within any of the specific items in Group 16, so the questions for the FTT were whether the word “cultural” applied to facilities as well as events, and whether the supplies were “similar” to relevant facilities. The FTT took a different approach from that argued by the parties, finding that the phrase “similar cultural events and facilities” was a description of the items listed in Group 16, rather than a separate definition. If a supply was sufficiently similar to the items listed, it would be the supply of a cultural event or facility. However, the FTT concluded that David Lloyd’s supplies were not sufficiently similar (functionally or otherwise) to either any specific listed item or to the items viewed as a whole, considering their common characteristics. Accordingly, the supplies did not qualify for the reduced rate. The FTT dismissed David Lloyd’s appeal. (Contact: Andrew Clarke)
The next Deloitte Legal EMEA Dbriefs webcast will take place on Monday 6 July 2026 at 12.00 BST/13.00 CEST. In The Fair Work Agency – what do employers need to know?, our panel will discuss the recently established Fair Work Agency (FWA), looking at the FWA’s role in enforcing employment law and the National Minimum Wage (NMW). The webcast will look at the FWA’s enforcement powers and expected implementation timeline, the new requirement to maintain detailed holiday records, how to prepare for proactive FWA enforcement, and practical lessons from HMRC’s historical NMW enforcement activities and how they translate into other workers’ rights.
Then on Wednesday 8 July 2026, at 14.00 BST/15.00 CEST, there will be a Deloitte Legal EMEA Dbriefs webcast titled One directive, 27 realities: EU pay transparency across Europe in practice. The webcast will look at the implementation of the EU Pay Transparency Directive, examining the most significant areas of divergence in national implementing legislation across the member states, emerging market practice, and what this means for in-scope businesses.