Several celebrities have been named in an alleged ‘$700 million tax relief scheme.’ Her Majesty’s Revenue and Customs Agency – an organization responsible for the collection of taxes in the United Kingdom – argued it was a type of tax avoidance.
According to the BBC, some of the famous individuals included Robbie Williams, Phillip Schofield, and David and Victoria Beckham.
There were more than 1,000 people who invested into the financing company, Ingenious, which was created to reorganize funds in the hope of securing tax benefits.
Ingenious – who helped fund movies like Avatar – qualified for tax breaks that were supposed to support the UK film industry, however, the HMRC said Ingenious claimed relief on “artificial losses from its films.”
The Her Majesty’s Revenue And Customs Agency went on to say the ‘schemes’ were not real investment opportunities but rather, were a means of avoiding paying the government.
Because of the illegitimacy of the claims of Ingenious, a tax tribunal upheld a decision to force the “investors” to pay the money back.
What this means, is that the 1,400 people who were involved will now be obliged to pay significant fines.
The BBC reported that those who invested more than $100,000 were promised to get generous tax reliefs regardless of any losses incurred from the film productions.
Although the investors only neglected to pay $420 million in taxes, the interest on the original amount will bring the total to $700 million.
A spokesperson for the HMRC said they were pleased the tribunal came to the conclusion that the initial tax deductions were not justified.
And how did the 1,400 investors respond to this? According to the British publication, many claimed they were simply ‘poorly advised’ about the plans and were entirely unaware of the risks. This isn’t the first time celebrities have attempted tax evasion. Last year, the HMRC won a case against another company called Icebreaker, that was designed to bring tax credits to its investors.