UK investment group Ingenious Media has advised thousands of investors - including David Beckham and Robbie Williams - that they should act fast to repay HMRC the money they saved through its tax schemes.
Clients of the company were able to cut their tax bill by investing in big-budget movies including Die Hard 4.0, The Life of Pi and Avatar. Their partnerships then recorded losses amounting to more than £1 billion, which could be offset against other earnings to reduce tax.
But as part of a £5 billion crack-down on "aggressive and contrived" tax avoidance schemes, the Treasury is now investigating schemes such as Ingenious Media's, which is expected to go to tribunal in November. Just last week, a list of celebrity investors in a similar scheme, run by Leeds-based Mercury Tax Group, was leaked to the Times.
Thanks to new rules included in this year's Finance Bill, investors are expected to start receiving demands for the disputed amounts, which will be repaid if the scheme is deemed legal. And Ingenious is now advising its clients to pay up now, pointing out that doing so will net them a discount on the total bill.
"Ingenious has been trying to obtain a definitive ruling on the tax status of its film and games partnerships for many years. The company requested a hearing before the tax tribunal in 2011 to resolve this matter as expeditiously as possible, but HMRC has repeatedly used stalling tactics to delay a hearing," it says in a statement.
"Ingenious is proud of its record in financing hit films, including Avatar, Life of Pi and The Best Exotic Marigold Hotel, which have generated more than £1bn of taxable revenue for the UK Treasury, with a further £1 billion of taxable revenue expected over the life of the films."
The 1,300 investors hit by the investigation include footballers Steven Gerrard, Wayne Rooney and David Beckham, according to the Daily Mail. Other celebrity members have been named as TV presenter Jeremy Paxman, presenters Ant and Dec and musicians Robbie Williams and Gareth Gates.
Niall Murphy, corporate partner at law firm Shoosmiths, says celebrities should think carefully before taking part in such schemes.
"The last couple of days has shown that even though a tax avoidance scheme may present itself as lawful, tax avoidance as a whole is still frowned upon by the public and media," he says. "Being involved in a tax avoidance scheme has the capacity to potentially damage someone's career – impacting negatively upon their reputation and hence, their future earnings."