LONDON: Lord Carlile QC, whose specialisms include white-collar crime, said funding for British films was among victims of “unpredictable” reversals in tax rules.
Other cases of “unfairness” included one in which an investor residing overseas for more than 30 years had been landed with a “huge” tax bill after HMRC suddenly changed its guidance.
Lord Carlile said: “Individuals have found themselves paying far more tax than expected, as a result of unheralded and unexpected changes of heart by HMRC. The consequences are bad for the affected taxpayers, bad for the Revenue, and bad for Britain.
“Wealthy and successful people are choosing elsewhere to invest their money, and elsewhere to live. This is inconsistent with the reasonable ambition that the UK should be a desirable location for global business, and for personal wealth properly earned.” He criticised “disturbing” fluctuations in the taxman’s approach to film financing schemes which “had chilled the UK as a destination for film production”.
Lord Carlile did not cite any names, but many celebrities are understood to have invested in film finance schemes in the belief that they were a legitimate way to limit their tax liabilities, before being faced with unexpected tax bills.
Those affected have been named in reports as including David and Victoria Beckham, Gary Lineker, Sir Bob Geldof, and Annie Lennox. Lord Carlile said: “To retain wealth within the UK and lessen the temptation for taxpayers to move abroad, government should intervene to leave business people with a lesser sense of being victims of an overbearing and unsympathetic revenue service.”
HMRC rejected his claims and added: “The tax guidance we provide will accurately reflect current tax law and legislation. Any taxpayer who disagrees with our interpretation can take HMRC to tribunal. But they should be aware we win around 80 per cent of all cases heard in the courts and many more tax avoiders settle before it gets to that stage.”
