The top 12 considerations for your 2026 operational and strategic ‘Spring Clean’

Running a growing venture capital or private equity firm involves navigating a wide range of operational and structural considerations. As new funds are raised and deployed, group structures can become complex, increasing the risk that important tasks are overlooked or pushed down the priority list.

Drawing on our experience working with firms across the sector, we’ve compiled a list of the top 12 commonly overlooked areas that we believe could benefit from a review:

1. If you operate as an LLP, have you considered the salaried members rules recently?

The Supreme Court hearing of BlueCrest vs HMRC was held on 28 and 29 January and we await their judgement. Irrespective of the outcome, the rumours before the most recent budget about ‘partnership NICs’ demonstrate the issue of self-employment for LLP members is in the minds of politicians. While we await further developments, it is still worth refreshing your understanding of which salaried member condition(s) your LLP members fail and should be it be condition B (significant influence), it may be sensible to document all their roles and responsibilities and discuss with a tax professional.

2. Have you carried out a recent review of your tax structure?

For example, have you modelled the tax that will become due on future fund disposals to ensure the allocations flow through the structure as expected?

3. Are all your FCA permissions still required and is your compliance manual up to date?

The FCA remain keen for regulated firms to monitor their permissions on an ongoing basis and relinquish those they’re not using. Have you recently reviewed your compliance manual and procedures, for example your reconciliation procedures that may be required under CASS 6?

4. Is your VAT group current?

When a firm launches new funds, it is vital to update the VAT group to include new GP entities. An out of date or incomplete VAT group could lead to avoidable VAT leakage.

5. Is your VAT recovery still fair and reasonable based on current activities?

Many PE/VC firms will be partially exempt, so the recovery of residual input VAT will be subject to a partial exemption calculation. Commonly, a special method is agreed with HMRC that reflects activities at a point in time. It is important to revisit this method periodically as a business develops, to ensure it remains appropriate.

6. Is your insurance up-to-date and does it cover your needs?

The risk landscape for funds and fund managers continues to evolve. Emerging risks, including cyber, IP disputes, and increasing shareholder litigation pose increased risk. Are you confident fund-level insurance covers against these risks? Do you have a clear and up to date view of insurance cover held by the portfolio? Have you reviewed insurance terms included in term sheets to better manage this evolving risk for the portfolio, fund and LPs?

7. Have you considered the latest IPEV guidelines?

Revised guidelines were published on 11 December 2025 and are in effect for quarterly reporting periods beginning on or after 1 April 2026. The changes were primarily to the guidance rather than the principles. AI now has its own section for the first time, but the board are cautious on its use: ‘AI is a tool that can augment the valuation process when used with appropriate professional judgement.’ The tools ‘are not a replacement for human professional judgement and scepticism’.

8. For funds in their realisation period, are the carried interest arrangements fully understood by key stakeholders?

Distribution waterfalls can be complex, and the outcome is a sensitive area for investors, employees and principals. To reduce the risk of contention or the embarrassment of an error, it is worthwhile working through scenarios and any matters of judgement or ambiguity well in advance of a crystallisation event.

9. Are your principals or key employees impacted by Carried Interest Reform?

From 6 April 2026 carried interest will be deemed trading income and therefore subject to income tax in the UK. For qualifying carried interest, a 72.5% multiplier is applied reducing the effective rate for top level taxpayers to ~34.1%. The qualifying criteria is based on an average holding period which should be straightforward enough in a conventional PE/VC fund but can be far more complex in credit funds or fund of funds. There are also complex overseas aspects with the risk of double tax for internationally mobile carry recipients.

10. Are you ready for the changes to FRS 102?

Although the first financial statements applying the revised FRS 102 may still be some way off for your firm, it is worth getting a head start – particularly with the introduction of the five‑step model for revenue recognition. While the general industry view is that the impact on management and advisory fees will be limited, firms should still assess their contracts, with particular attention to any non‑standard or bespoke arrangements. Further thought will also be needed in relation to carried interest and performance fees.

11. If you operate as an LLP, have you reviewed the latest LLP SORP?

A revised SORP was published on 3 November 2025 and is effective for periods commencing on or after 1 January 2026. The changes are modest, mostly updating for the revisions to FRS 102 and entity size thresholds, but also clarify treatment of members’ remuneration in group scenarios.

12. Are you aware of the new filing obligations for LPs and GPs?

The Economic Crime and Corporate Transparency Act 2023 brings with it the requirements for LPs to file annual confirmation statements at Companies House for the first time from Spring 2026. GPs must also have a registered officer who must be an individual who is one of the GP’s managing officers and their identity is required to be verified.

Would you like to know more?

If you would like to discuss any of the above and how it impacts you, please contact Simon Lewis or Andrew Snook using the form below.