Celebrity ‘scam for scumbags’ scheme WAS tax avoidance
HMRC wins court battle over £700m in unpaid bills
A CONTROVERSIAL film investment scheme backed by celebrities has lost a court bid to overturn a £700million tax bill.
Stars including former footballers David Beckham and Gary Lineker invested huge sums in the Ingenious film financing plan, which offered significant tax relief.
The firm helped to produce films such as The Best Exotic Marigold Hotel, Life Of Pi and Avatar. Some 1,400 investors were given tax breaks on any losses the movies made because they were supporting the British film industry.
But Her Majesty’s Revenue and Customs said such schemes were not legitimate investments, but a form of aggressive tax avoidance. Its former boss, Dave Hartnett, even described them as ‘scams for scumbags’.
In August, a court ruled that investors who expected to receive 100 per cent tax relief on their investment should only get 30 per cent.
Ingenious disagreed, but a tax tribunal has now upheld the 2016 decision to recoup tax that Paid up: Gary Lineker was avoided – leaving investors facing hefty bills. Tax tribunal Judge Charles Hellier ruled – with ‘misgivings and reluctance’ – that previous tax breaks were not ‘allowable deductions’.
Tax worth £420million was avoided, but the figure owed is closer to £700million once interest is included.
An HMRC spokesman said: ‘We are pleased the tribunal has agreed with us that the vast majority of what was claimed in tax relief by Ingenious investors was simply not due.’
Lineker, who hosts Match Of The Day on BBC1, is among a number of stars who put at least £100,000 each into the scheme. Others included footballer Wayne Rooney and TV hosts Jeremy Paxman, Davina McCall and Ant and Dec.
HMRC has argued that Ingenious had claimed tax relief on artificial losses on its films.
It insisted the schemes were not legitimate investments, but simply a means of avoiding tax.
Many celebrity investors claimed they had been poorly advised and had not understood how the schemes worked.
It is understood that those in the scheme were given the opportunity to pay their bills before the case went to court. It is not known which celebrity backers paid up before the lat- est battle. Lineker was criticised online yesterday for his involvement, facing a barrage of abuse on social media.
In a series of tweets he said he was not involved in the current legal action, adding: ‘ Coughed up years ago sorry to disappoint’, and ‘Sorry to disappoint but it’s not true. I have nothing to do with this court case. I paid all that was due years ago.’
Yesterday, HMRC said the ruling made last month was a victory. A spokesman added: ‘ We are pleased that the tribunal has agreed with us that the vast majority of what was claimed in tax relief by Ingenious investors was simply not due.’
Ingenious said: ‘It is wholly unsatisfactory that the tribunal reached this decision with “misgivings and reluctance”. We will be appealing.’
Mr Lineker’s spokesman said: ‘Gary was not directly involved in this action between Ingenious and HMRC. He has paid all taxes currently due and will continue to do so.’
In the Nineties, the Government tried to incentivise investment in the film industry by offering tax relief against losses. The regulations were later tightened, and any tax benefit is now retained by the film company.