Hundreds of people who invested in Elysian Fuels, a now defunct green-energy partnership, are facing hefty tax bills from HMRC even as they have lost their money.
Some £180m is believed to have been invested in Elysian through personal pension plans, with most investors being ordinary workers. However, it also attracted Rafa Benítez, the football manager, bankers and professional footballers.
The scheme, set up by Future Capital Partners (FCP), was sold as a green investment into Britain's burgeoning biofuel community. In 2015, Elysian Fuels was worth next to nothing as the prices of oil slumped and investors lost their money.
People have lost money that they intended to use as an inheritance for their children, and on top of that they have been left with huge tax bills"
Documents seen by the newspaper suggest Elysian was touted as a pension liberation scheme, or a method to extract money from a pension pot before the age of 55. The reason why HMRC is now pushing through with huge tax bills.
A former children's nursery worker, 58, who invested £116,000 of her retirement funds in the failed green energy scheme, has lost her pension and faces a tax bill for £67,000 plus interest because the tax office believes she was trying to avoid tax, The Times wrote.
"People have lost money that they intended to use as an inheritance for their children, and on top of that they have been left with huge tax bills," Nick Wood, of Newport, a company representing more than 400 investors, told the newspaper.
The Financial Services Compensation Scheme saw an £11m increase in Sipp related claims in the 2018/19 financial year, the lifeboat fund has revealed. The FSCS paid out £123m in Sipp-related compensation, out of a total of £157m in claims against life and pensions intermediaries.
The number of complaints to the Financial Ombudsman Service about Sipps has almost doubled in the past year. It received 3,811 complaints in the 2018-19 financial year, up from just over 2,000 in 2017-18. Some 60% of complaints were about a lack of due diligence by Sipp providers, and 15% related to advice on investing in unregulated schemes.