UT (Tax & Chancery) UT-2022-000134 UT-2022-000135 UT-2022-000137 - [2025] UKUT 00214 (TCC)

the Desk was set a target of £8.5m for 2016/2017; and

Mr Heiberg, who wanted to expand MHI’s business and for it to win more RFQs, told the Desk in May 2016 that he wanted to increase the Desk’s overall “hit ratio” to 15%.

Whilst this target was generally referred to by the parties as a “P&L” target, it was not consistently explained in the evidence to which the Tribunal was referred as to whether it was a target for profitability or revenue. The MHI Compliance Report referred to this as a revenue target, setting out P&L numbers separately (apparently showing the Desk as loss-making), and Mr Heiberg confirmed to the Authority that this was “pure revenue”. The difference is clearly commercially significant; however, the Tribunal proceeds on the basis that the measure is less significant than whether it was met and indeed accepted as being met by Mr Heiberg and others within MHI.

The Desk had not achieved its target in the two preceding financial years. The target had been £12m for 2014/2015 but in Mr Urra’s appraisal for that year it was recorded that at the end of February 2015 the Desk had achieved £6m. The target for 2015/2016 was reduced to £8.5m, but this was not achieved.

The Desk’s target then remained unchanged at £8.5m for 2016/17. It was described by Mr Heiberg as “modest”, and he drew attention to the changes in personnel on the Desk (including the recruitment of Mr Lopez and Mr Barouti).

Mr Urra had a personal target of £5m. For 2014/15 his target had been £3m, which he had easily exceeded, with performance of £5.7m by the end of February that year. For 2015/16 his target was £5m, and whilst he was said to be on track to achieve this in his performance review (having generated £4.27m to date), he fell short by the end of the year.

Mr Lopez was on probation during the Relevant Period. His target was £1m for the financial year.

Mr Sheth also had a target of £1m. Mr Sheth’s evidence was that he had been unaware of the target during the Relevant Period. On the basis of his appraisal form for that year (both the stated objectives and his own comments thereon) the Tribunal finds that he was aware of this target by the end of the financial year, ie in February or March 2017. The Tribunal accepts Mr Sheth’s evidence that he had not known during the Relevant Period that he had this specific target; we do, however, find that Mr Sheth did know that he, like all traders, was expected to generate an overall profit from his trading.