Wealth manager slams HMRC ‘intimidation’ as probe launched

Wealth manager and tax planning firm BlackStar has defended two of its investment products and slammed HM Revenue and Customs’ “disruptive and intimidating tactic”, after the tax regulator launched a criminal investigation into the firm over start-up investments.

In a statement published on its website the firm said HMRC’s move is one it has used with other firms “when [it is] not satisfied with the results achieved through a more dignified enquiry process”.

A statement from BlackStar said: “Our view is that this is a blatant attempt to bring this successful range of investments to an abrupt end. We do not accept HMRC’s position in this matter.”

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The comments follow months of negotiation between the two over pooled investments into start-up companies seeking patents for new products. Discussions revolved around repayment claims as well as the the commercialisation of successful investments, BlackStar said.

It added that the negotiations were successful insofar as clients are now receiving repayments which HMRC had previously withheld.

According to FTAdviser sister title the Financial Times, the investments included shares in Luxpand Ltd, a company that sought a patent for an apparatus for raising the pile on towels, which was rejected by the European Patent Office in March 2011.

Investors also bought shares in Showcase Booths, which had an application for a patent in a video greeting card business rejected in April 2011. Both are in liquidation.

The FT said that letters have been sent by HMRC to investors in the BlackStar products informing them that a criminal investigation is under way.

A BlackStar statement said: “Perhaps more [worrying] is the fact that HMRC refused the concept that any of the investments were successful, despite BlackStar cooperating and supplying them with all the paperwork and explanations.

“As a result, HMRC has chosen to attack the products by bringing the threat of a criminal investigation.”