Money Covered: The Week That Was – 7 August 2026

Welcome to The Week That Was, a round-up of key events in the financial services sector over the last seven days.

The first of Season 5 of our podcast, Money Covered – The Month That Was, was released this week. David Allinson and Mel Redding discuss the FCA’s proposed section 404 consumer redress scheme for vehicle finance.

To listen to this and all previous episodes, please click here. 

Headline development 

FRC publishes insights on materiality in corporate reporting 

The Financial Reporting Council (FRC) has published insights intended to support boards, preparers and investors in applying and assessing materiality in corporate reporting. The FRC reiterates that materiality is fundamental to high-quality reporting and is a matter of judgement for which directors should take ownership.

The FRC encourages companies to treat the annual report as a communication tool rather than a compliance exercise, and materiality is framed as prioritising information most relevant to shareholders and other primary users. The FRC says that companies should avoid “immaterial” disclosures that can dilute clarity. It also notes that annual reports have become longer and more complex over time as requirements and stakeholder expectations have expanded, and it signals support for more concise, coherent and decision-useful reports. The FRC encourages preparers to engage with investors and to challenge whether disclosures tell the most coherent story of the business and its value drivers. The publication is a renewed regulatory signal to reduce immaterial disclosure and improve readability, potentially supporting more assertive editorial decisions (with appropriate governance and documentation). The FCA considers there is a practical need to evidence the process used to determine what is material, and how disclosures align to the company’s key value drivers and investor decision-making.

To read the publication, please click here.

Relevant case law updates

No special strike-out rule for 'Grovit' Abuse: BlackBerry v Optiemus in the Court of Appeal

In BlackBerry Ltd v Optiemus Infracom Ltd [2026] EWCA Civ 1004, the Court of Appeal (CoA) dismissed Optiemus’ appeal against the Commercial Court’s refusal to strike out BlackBerry’s claim for abuse of process arising from delay.

Optiemus alleged that, after the Covid pandemic, BlackBerry had effectively allowed proceedings to go dormant. Optiemus relied on Grovit v Doctor [1997] 1 WLR 640 - a leading authority on abuse of process which confirms that litigation is not something a party may start and then keep in limbo for tactical or unjustified reasons.  It argued that an abuse of process occurred as BlackBerry deliberately chose not to progress the case, without agreement or the court’s permission, for reasons that were not objectively sufficient to justify the delay.

At first instance, the High Court accepted that Covid constraints explained an initial period of inactivity from BlackBerry but held that a later period was unjustified and amounted to a “Grovit” abuse.  Even so, the High Court refused strike out on the basis that it was a disproportionate sanction.

On appeal, Optiemus contended that once such abuse is shown the claim should be struck out absent “compelling reasons” to continue, drawing on pre-CPR authority and Watford Control Instruments Ltd v Brown [2024] EWHC 1125 (Ch). The CoA rejected that any special, heightened test should apply and that the courts must apply the overriding objective and ask whether strike out is the just and proportionate response. 

Click here to read more.

Court of Appeal confirms loan from EBT does not constitute taxable earnings

In HMRC v M R Currell Ltd [2026] EWCA Civ 445 the Court of Appeal confirmed that a genuine loan, which was expected to be repaid, did not constitute taxable "earnings" under section 62, Income Tax (Earnings and Pensions) Act 2003.

In 2010, a company, M R Currell Ltd, made a payment of £800,000 to an employee benefit trust (EBT). The owner of the company then entered into a loan agreement with a trustee of the EBT for £800,000. HMRC determined that the payment to the EBT constituted taxable earnings of the company's owner and therefore the company was liable to income tax and national insurance contributions in respect of those earnings. The company appealed and the dispute reached the Court of Appeal.

The Court of Appeal dismissed HMRC's appeal. Whilst the Court accepted that the loan was provided because of the owner's work, the payment to the EBT was not a reward for services merely because it funded the loan. The Court noted that all loans provide access to cash, but this is crucially subject to a repayment obligation. The Court therefore concluded that, in general, the advancement of a loan will not amount to a payment of earnings in the amount of the principal of the loan. However, it did not exclude the possibility that the advancement of a purported loan could amount to a payment of earnings where the loan is a sham or where it was never intended that it should be repaid, such that the true agreement is not one of a loan. 

The Court did note that if the transactions had been implemented only a short time after they were, the charge HMRC sought to impose would have arisen on the loan under Part 7A, ITEPA 2003, which was introduced by Finance Act 2011.

To read more, please click here.

With thanks to this week's contributors:  Lauren Butler, Daniel Parkin and Dorian Nunzek.

If you have any queries please do get in contact with a member of the team, or your usual RPC contact.