Wealth Manager - the site for professional investment managers

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

Celebrities face £1bn tax bill in HMRC crackdown

Celebrities face £1bn tax bill in HMRC crackdown

A raft of celebrities that include David Beckham and Andrew Lloyd Webber face a potential tax bill of £1 billion in a dispute over an Ingenious film shceme, which HMRC alleges was used as a tax avoidance scheme.

The Revenue is attempting to demand the film scheme investors pay back tax relief received on their investment before a court battle gets underway to determine the legitimacy of the schemes, the Sunday Times has reported. 

The celebrities each paid a minimum £100,000 to invest in the Ingenious Film Partners 2 LLP, a film scheme that qualified for tax breaks under rules that were aimed at stimulating the British film industry under the previous government. The scheme helped to fund films such as Life of Pi, Avatar and Girl With a Pearl Earring. However, HMRC now argues that these schemes were not legitimate investment opportunities but rather used to avoid tax.

Ingenious, formerly led by Patrick McKenna, has retailiated by sending a letter to its clients warning them of HMRC's 'draconian' plans to force them to pay up before their case comes to court. The approach forms part of the Revenue's attempt to clear a backlog of 65,000 individuals and businesses suspected of using tax avoidance schemes.

The move also forms part of a long-running dispute with Ingenious Media Investments. Ingenious denies the schemes were designed to avoid tax and intends to fight the case at a tax tribunal, scheduled for November.

The Sunday Times reported that under current legislation the schemes’ investors would be able to keep the tax relief until litigation or an investigation was completed.

However, the paper said that HMRC now wants the forthcoming Finance Bill to force firms and individuals under suspicion of benefiting from a tax avoidance scheme to repay the disputed money.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Taxicab Tenner: AXA IM's Nicolas Trindade

Taxicab Tenner: AXA IM's Nicolas Trindade

After a summer break, it is the turn of AXA Investment Manager's Nicolas Trindade to give a £10 view of how fixed income is faring.

Play Wealth Manager Olympics: the Relay

Wealth Manager Olympics: the Relay

In the final round of the Wealth Manager Olympics, our intrepid athletes team up for the relay.

Play Wealth Manager Olympics: the Shot Put

Wealth Manager Olympics: the Shot Put

After busting a gut in the 100m sprint, our wealth manager Olympians displayed their brute strength in the shot-put.

Read More
Your Business: Cover Star Club

Profile: gearing up for the shift from consolidation to start-ups

Profile: gearing up for the shift from consolidation to start-ups

‘I think the industry is evolving rapidly, but not necessarily as a whole,’ says the head of recently launched Charles Nicholson AM

Wealth Manager on Twitter