Dozens of public figures could face massive bills from the Inland Revenue after an investigation into an alleged tax-avoidance scheme which exploited a legal loophole affording tax benefits to investors in the British film industry.
Sportsmen, television presenters, musicians, and members of the House of Lords are believed to be among the celebrities who paid sums from £160,000 to £1.4m into a fund which is under scrutiny by HM Revenue & Customs, The Mail on Sunday reported.
They were said to be among the partners in schemes run by Ingenious Media, a finance company which over the past 10 years has raised some £5bn for the film industry, investing in films that include Avatar and Night at the Museum.
The Inland Revenue believes the primary purpose of the fund to have been tax avoidance rather than investment in films, the newspaper said, in which case it would breach rules laid down by Gordon Brown, when he was Chancellor, under which investors could reduce tax bills by backing the film industry. Such schemes have since been outlawed.
The Mail on Sunday said it had seen documents showing that one industrialist had invested £62m with Ingenious over 10 years, and that the firm's schemes were also used by bankers keen to minimise the tax they had to pay on their bonuses.
Ingenious Media has told investors of the inquiry in a letter stating HMRC believes that "the partnership was not trading on a commercial basis and so [partners] have underpaid tax" – an interpretation which Ingenious's chairman, Patrick McKenna, has told investors he believes is wrong.
HMRC told the paper: "If we find evidence of abuse we will take steps to put things right."Reuse content