At least 70 per cent of investors who put cash into film investment schemes are facing financial ruin. The statement, issued by a representative of hundreds of investors in the Eclipse scheme, follows a statement to tax advisers from HM Revenue & Customs (HMRC) saying they could face demands of up to 20 times their initial investment.
Members put in cash topped up with large loans, claiming tax relief on the interest payments. The highly leveraged deals have ramped up their tax liabilities.
“Your average investor is in the legal profession, dentistry, accounting […] a lot of the people are FCA-regulated lawyers, accountants, they will lose their ability to earn money if they are forced into bankruptcy.”
Demands are expected to be sent out by HMRC within two months while Eclipse is expected to seek a judicial review of the decision. There is no suggestion the schemes are illegal.
Over £2 billion has been collected by the taxman from users of tax avoidance schemes as a result of new government measures introduced in 2014 to collect disputed tax upfront. The new Accelerated Payments notices mean that users of tax avoidance schemes pay disputed tax up front while their tax affairs are investigated, instead of waiting until they are concluded.
If you are concerned about a tax enquiry into your affairs, or you are already under enquiry, contact us as soon as possible. Our tax specialists, some of whom are former HMRC Inspector of Taxes, are well versed in dealing with all types of tax issues. We are also readily available to oversee HMRC disputes on your behalf, as well as to represent clients in appeal proceedings before the Tax Tribunal. In some situations we can also offer professional fee protection insurance, so the costs are covered in whole or in part.
If you have any concerns relating to your tax affairs, please contact your usual Beavis Morgan partner.