The law firm acting for the claimants said their clients were misinformed that the tax reliefs had been approved by HMRC and were permitted by law.

A group of 45 former Premier League footballers is suing professional advisors linked to a film investment scheme that had been in trouble with the tax authorities.

Peters & Peters, the London law firm acting for the claimants, told WealthBriefing that the former footballers are among 122 investors who took part in the Ingenious Media scheme between 2000 and 2013 and who are now taking legal action.

The law firm has issued proceedings against the Ingenious group and three of its directors, including its founder, Patrick McKenna. The lawyers also confirmed that claims are being brought against professional agents and financial advisors who sold, recommended or marketed the investments, as well as several banks that financed the deals.

Ingenious Media is a British media investment and advisory group founded in 1998 by McKenna. The firm has already had its share of incidents involving tax issues. In August 2016, HM Revenue and Customs won a tax avoidance battle against the Ingenious Film Partnership's avoidance scheme.

A partner at Peters & Peters, Jonathan Tickner, who is leading the case, said: “We are acting for 122 clients seeking redress against Ingenious Media and other professional advisors for losses incurred as a result of their investment in film tax schemes. Clients include former Premiership footballers. Investors have all suffered significant financial losses as a result of these schemes being mis-sold to them as legitimate opportunities in which to invest in film or other media businesses. They were misinformed that the tax reliefs had been approved by HMRC and were permitted by law."

Tickner added: “This is particularly hard for sporting professionals whose earning potential is at its peak for only a few years. A number of those affected are now facing bankruptcy.”

The lawyers said that a case management conference was likely to take place in October. The firm refused to name its clients. ​A spokesperson for Ingenious Media said, "these claims are without merit and will be vigorously defended".

Tax benefits
Financial issues have hit sports personalities recently, including Boris Becker’s bankruptcy, which was reported by this publication. As sports stars look to make investments to diversify their portfolio, they need to make safe bets, which is what RBC Wealth Management’s Sandy Swinton said to this publication recently. 

According to Miles Dean, managing partner of Milestone International Tax, the issues with the tax man when dealing with these types of investments is because the tax benefits are placed as more important than the investment.

"Caveat emptor – a fool and their money. It is highly likely that all investors will have signed waivers so the burden of proof will be very high,” said Dean. “The most common reason for investment schemes failing foul of the tax courts is that the investment element is secondary and the tax benefits primary. The scheme providers will argue differently, but the investments were not really investments. They were designed to create losses (an investment usually produces a return) against which income could be offset; neither the agent, the independent financial advisor nor the footballer would fully understand the scheme they were participating in, other than believing it would reduce their tax bill,” Dean said.

Dean, who is a founding partner of Milestone International Tax with over 20 years' experience of advising clients on a wide range of international tax issues, added: “Until 2013, the tax avoidance industry was rampant in this practice and Ingenious, together with their appointed QCs, were at the top of the food chain. Football is rife with greed and corruption from FIFA downwards. The problem is that most footballers tend to have very limited knowledge of tax law, not least very complex tax driven schemes, and their agents are no better. It is likely that many of the IFA’s selling the schemes wouldn’t fully understand the complexities of the arrangements at hand."