UK football icons Beckham, Lineker among losers in film investment case ruling

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HM Revenue & Customs has won a judicial review of key legal issues involved in certain film investment schemes offered by the London-based Ingenious investment group, which had been invested in by such well-known former football stars as David Beckham and Gary Lineker.

The Court of Appeal decision in favour of HMRC was published on 12 December, and upheld an earlier finding that so-called Accelerated Payment Notices (APNs) and Partner Payment notices (PPNs) – which had been issued by HMRC and required some 81 Ingenious scheme investors to pay tax they were found to owe on their investments – had been justified, and had not been in breach of the claimants’ human rights.

The ruling has received publicity in recent days following publication of stories on the matter in the Daily Mail and Sun newspapers.

The case was unrelated to another case involving Ingenious, in which the film company is currently appealing against a decision handed down last June, which found in favour of HMRC over its claims that a film investment scheme which involved some 1,400 investors had been intentionally designed to facilitate tax avoidance, a spokesperson for Ingenious said.

That case, which centred around a £700m tax bill HMRC said the investors owed, is one of many that HMRC has brought in recent years, in which it has sought to target what it says are tax avoidance schemes masquerading as investment vehicles.

Hearing in July

In the most recent ruling, England and Wales Court of Appeal justices Arden McCombe and Thirlwall said they had looked at previous cases involving APNs and PPNs, including “the Vital-Nut” and “Rowe” cases, and concluded HMRC was within its rights to make use of APNs and PPNs in the Ingenious matter in question. The 53-page judgement followed hearings held in July.

The decision only addressed the matter of the use of APNs and PPNs – which were introduced in 2014 to, as the court documents put it, “[end] the economic benefit to taxpayers of retaining an amount equal to the disputed tax until the issue is finally [resolved]”.

As the document also noted, the nature of the anticipated tax liability of the “appellant taxpayers” was not considered “material to this judgment”.

An HMRC spokesperson told International Investment that the Revenue thus far has “comprehensively won all six judicial reviews heard so far in challenges to the APN regime”.

The spokesperson added: “We are pleased that the Court of Appeal has again supported HMRC’s operation of the Accelerated Payments regime.

“Tax avoidance doesn’t pay. Most schemes simply don’t work – and people can end up paying more than they were trying to avoid in their misguided attempts to save money.”

This story has been updated to clarify the distinction between the recent judgment over the legality of the APNs and PPNs, and the ongoing case involving Ingenious’s challenge to HMRC over the legality of its film investment partnerships.