Andrew Lloyd Webber has joined around 500 former clients of Ingenious Media – including a series of high-flying bankers – to launch a lawsuit against the company's film investment scheme.
Patrick McKenna, chair of the company - which has been accused by lawyers for HM Revenue & Customs (HMRC) of running a tax avoidance scheme – told Bloomberg the claims were ‘without merit and will be vigorously defended’.
Both HMRC and Ingenious claimed victory in a four year court battle in 2016, following a decision which ruled in favour of parts of the tax relief claimed by the fund while disputing others. The legal process remains ongoing.
Lloyd Webber, the star composer behind West End hits such as Phantom of the Opera and Cats, joined a series of sporting and show business celebrities to back a court action claiming that Ingenious’ promotional materials ‘made representations of fact which were false and which they had no reasonable grounds for believing were true’.
Lloyds head of credit trading Oliver Carter, former Barclays director Rob Dornton-Duff, former Credit Suisse managing director Simon Meadows and Goldman Sach trader Dermot Keane are reportedly among the City clients joining them.
Stewarts Law head of tax litigation David Pickstone, who is representing the claimants, said they expect to recover around £200 million on behalf of around one in four original investors in the fund.
HMRC has aggressively challenged the use of film funding tax breaks in recent years, successfully arguing in a number of cases that they have been used as vehicles for tax avoidance.
Earlier this year it was revealed that new Financial Conduct Authority chairman Charles Randall had invested in the Ingenious scheme, a decision he described as an 'error of judegement'.
Read about some of the footballers who have faced tax trouble here.