Posted: November 17, 2016
The news that Wayne Rooney was facing a potential £3.5 million tax bill over alleged involvement in a film tax avoidance scheme has raised the profile of these dubious tax measures.
According to The Times, the Manchester United and England captain was the biggest investor in one of the highest profile film schemes.
He is believed to have been informed by HM Revenue & Customs (HMRC) that the investment is liable to retrospective tax action.
Introduced by former chancellor Gordon Brown in 1997, the schemes were popular investments among the rich and famous due to their generous tax benefits.
However, HMRC has recently became concerned the schemes were being used to avoid tax rather than fund the British film industry.
At the end of last year it emerged that a host of retired footballers lost more than £100 million through a film investment scheme that was sold through an advisory firm.
The old adage that ‘if something looks too good to be true’ certainly has merit in these cases. But there is a clear line between tax avoidance and evasion – and, for many of the film schemes in the press, the line between avoidance and evasion has become blurred.
As Simon Bailey, partner at Burgess Hodgson, says: “Everyone is entitled to arrange his/her tax affairs in order to minimise the tax within the scope of the UK tax legislation, but willfully or negligently paying the incorrect amount of tax could prove more costly in the end.
Tax planning is one of Burgess Hodgson’s key strengths. The team works hard to help clients navigate and utilise the legislation in order to reduce their tax burdens without over stepping the line.
This type of tax sheltering might look like clever tax planning but we would strongly recommend that anyone considering a scheme of this sort speaks to an independent, professional advisor such as ourselves before entering into an agreement they might live to regret in the future.”