Footballers face HMRC backlash over £250m movie scheme investment

Nearly 130 top footballers are under investigation by HMRC after investing £250m in a tax avoidance scheme through financial adviser Kingsbridge.

The footballers involved are understood to come from an array of top clubs including Liverpool, Aston Villa and Blackburn, with one unnamed Manchester United star reported to have invested £33.5m using a combination of loans and his own money.

Investors in the scheme used a combination of their own funds and loans to invest in film projects such as Disney’s Enchanted and gaining tax relief as the Labour government aimed to support British filmmakers with tax breaks between 2000 and 2004.

The scheme meant investors would not have to pay tax for 15 years but the tax breaks were scrapped by HMRC in the late 2000s.

Sarah Coles, personal finance analyst at Hargreaves Lansdown, said: "It’s part of enhanced anti-avoidance activities in recent years, which between 2010 and autumn 2017 have brought in an estimated £160bn in tax. Those who tried to take advantage now face paying the tax, interest and fines."

Advisers at Kingsbridge, which went into liquidation in 2015, are alleged to have continued recommending the scheme even after the tax breaks had been cancelled.

HMRC is now looking to force investors to repay 70% of what they contributed, with fines added on top if it can be proved that the scheme was illegal.

Critics of the scheme insist players knew they were avoiding tax, but some experts maintain they were not aware of how Kingsbridge intended to use their money.

Stuart Cotton, founder of Investor Rescue Organisation, said: "Footballers have been demonised over years for investments into tax avoidance schemes. The truth is most were not privy to how the arrangements work. The result of investing in such schemes is beyond comprehension at times."

Julia Norris of FS Legal said players should have been informed that the scheme was "high risk" but a spokesman for former Kingsbridge advisers said that investors were made aware of the products they were investing in "without exception".

Norris said: "Where investors try to reduce their tax bill, some might say they got what was coming. But many were going to pay any money owed down the line, plus interest. They are not tax dodgers. They are tax delayers. One man placed £300,000 of his own money, plus a £7m loan. He now has a £7m tax bill."