UK Supreme Court Rules Against Gerko in £22.5M Tax Dispute, June 18

The UK Supreme Court ruled on Wednesday that billionaire trader Alex Gerko’s currency-trading fund HFFX owed £22.5 million in back taxes. The fund was structured to pay corporation tax at 24% on profits shared with traders, but HMRC challenged the arrangement. The court sided with the tax authority, ordering the fund to pay 45% income tax instead. This ruling strengthens HMRC’s position in similar disputes with high earners.

What the Court Decided

The Supreme Court ruled that HFFX, set up by Gerko while he worked at trading firm GSA Capital, improperly structured its tax treatment. The fund was designed to distribute profits to traders at GSA Capital, including Gerko, while incurring only 24% corporation tax. HMRC argued this was ineffective tax avoidance. The court agreed, ordering the fund to pay 45% income tax on the distributed profits. The total bill reached £22.5 million.

Gerko’s Response and HMRC’s Victory

Gerko accused HMRC of ‘gloating’ after the loss, posting on LinkedIn that the effective tax rate reached 70%. HMRC welcomed the decision, stating it ‘confirms our position that the arrangements discussed in the ruling are ineffective.’ The authority said it remains ‘committed to pursuing those who avoid paying their fair share of tax.’ Gerko, a Russian-born trader who renounced his citizenship in 2022, has become known for his outspoken commentary on social media.

Broader Implications for Tax Disputes

HMRC has won multiple high-profile tax cases recently. In June, the Court of Appeal ruled in HMRC’s favour against Bolt in a £190 million VAT dispute. Uber faces a similar case with £1.446 billion in disputed tax sums on hold. These rulings show courts backing HMRC’s aggressive enforcement. HMRC is also broadening scrutiny of founders’ pay in company sales, signalling wider enforcement activity.

Who Is Alex Gerko

Gerko founded XTX Markets, a high-frequency trading firm. XTX committed more than £150 million to charities and good causes in 2025, making it one of the UK’s biggest charitable donors. Despite his philanthropic efforts, Gerko has attracted attention for his critical views on UK governance. In February, he wrote on LinkedIn that living in the UK for 2.5 years was a ‘radicalising experience.’

Final Thoughts

The Supreme Court’s decision confirms HMRC’s power to challenge complex tax structures used by wealthy traders and firms. With HMRC winning multiple recent cases, high earners face rising scrutiny on profit distribution methods.

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The content shared by Meyka AI PTY LTD is solely for research and informational purposes.  Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.