Film Scheme Investors Legal Challenge

Over 100 investors in film schemes have been given the permission by the High Court for a judicial review of HMRC’s demands issued last year in relation to the repayment of tax.

Accelerated Payment Notices (APNs) required those suspected of investing in tax avoidance schemes, such as film partnership schemes, to repay disputed unpaid tax within 90 days of receiving such notification from HMRC.

HMRC introduced APNs as just one method of clamping down on £7bn alleged tax avoidance through film schemes invested in by celebrities, sports personalities and business leaders.

An international law firm has brought the legal challenge on behalf of investors in film schemes set up by investment company Ingenious Media. Grounds for the legal action argue that the APNs are unlawful, and challenge the denied right to appeal. There is also a potential issue as to whether HMRC’s demands are in breach of human rights.

Investors in other alleged tax avoidance schemes are reported to be interested in joining the group legal action. It would mean that HMRC’s demands for immediate repayment of disputed unpaid tax from the individuals involved in the group legal action would be suspended until the judicial review has been heard.

In December 2014, HMRC announced that it planned to increase the amount of APNs issued to those it suspects of tax avoidance. The review is likely to be welcomed who have invested in film schemes similar to those developed by Ingenious Media.

One thing for certain is that HMRC will fight hard against the challenge. It has also stated that it will continue to issue APNs to those it suspects of tax avoidance, through film schemes, or other methods.

If you believe that HMRC might be closing the net on your tax affairs you can talk to us in complete confidence.

Call our tax investigations professionals on 0113 387 5670 or fill out an Enquiry Form and we’ll get back to you straight away.