Film investors win right to appeal on tax judgement

Film investors win right to appeal on tax judgement

A number of investors in Ingenious Media Film partnership schemes have been granted the right to appeal an earlier decision of the High Court today (2 December) by the Court of Appeal, dismissing their judicial review challenge against HM Revenue & Custom’s issuance of Partner Payment Notices.

International law firm Pinsent Masons, which is acting on the appeal, said over 80 claimants will be involved in the appeal, which is expected to take place towards the end of 2016.

Pinsent Masons said that accelerated payment notices (APNs) were introduced in July 2014, allowing HMRC to demand that disputed tax associated with a tax avoidance scheme be paid upfront, before a tribunal or court has decided whether or not a scheme is effective.

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PPNs are similar to APNs but are used where a notice is given to a member of a partnership or an LLP.

Pinsent Masons added that APNs and PPNs can be issued where schemes demonstrate certain ‘avoidance hallmarks’.

Steven Porter, senior associate at Pinsent Masons, said: “This was a sensible decision by the Court of Appeal, highlighting what they describe as the ‘real prospect of success’ and the importance of the issues to be considered.”

“The judgement in July did not, in our view, address some of the serious issues which use of PPNs in relation to these schemes poses. In many cases, HMRC checked and repaid the tax in question over 10 years ago - and is now trying to claw it back using new legislation.”

“Taxpayers are being faced with notices demanding the upfront payment of millions of pounds, prior to any formal decision by the courts or Tribunals. HMRC is moving much more quickly and aggressively than ever before. It is important that the new powers face proper scrutiny.”