Incoming FCA Chair Admits Using Tax Avoidance Scheme


Monday, March 05, 2018  06.35PM / By Kirsten Hastings, on 21 Feb 18 for Tax Avoidance 

The next chair of the UK’s Financial Conduct Authority said he made an “error in judgement” when he used a tax avoidance film scheme promoted by Ingenious, a firm that has lost several court battles against HM Revenue & Customs. 

Charles Randell, a former city lawyer and government adviser during the global financial crisis, was tipped to replace outgoing FCA chair John Griffith-Jones in early January.

He is expected to take up the role in April 2018. 

Adviser recommended

On Tuesday, he appeared before the Treasury Select Committee and said that the Ingenious Film Partners 2 scheme had been recommended to him by a financial adviser. 

Randell paid into the scheme between 2006 and 2011 and said that he had been told it was approved by the UK taxman. 

“I was reassured that this partnership had been discussed with senior officials at HMRC, who indicated that they approved of it,” he said to the committee. 

“It’s clear to me now that, far from taking any comfort from that, I should have seen it as a warning signal.”  

Letter to Treasury

In a bid to head off questions around his involvement with Ingenious, Randell wrote to the permanent secretary of HM Treasury to address the matter on 16 January.

“I thought it would be helpful to record in writing what I told the panel at the interview.” 

He explained thathe had invested in the scheme, which was promoted by his financial adviser.

“I also explained that I had fully settled my tax affairs in relation to the partnership, by repaying as requested by HMRC an amount of tax relief originally granted by them. I also confirmed that I had withdrawn from the partnership.” 

After the scheme was ruled to be invalid, Randell had to repay £114,000 ($159,421, €129,003) plus interest. 

He admitted to the panel that his decision to invest in the scheme was “an error of judgement which I regretted”. 

“I did not elaborate on this at the interview but I regret failing to independently investigate the assurances I received that HMRC were content with the partnership arrangements,” Randell wrote.  


Ingenious Media was founded in 1998 and has four operating divisions; investments, ventures, asset management and corporate finance.


In August 2016, Ingenious lost a case against HMRC which said it used artificial losses arising from investments in a range of films, including blockbusters Avatar, Life of Pi and Die Hard 4.0, to claim tax relief.


The First Tier Tax Tribunal ruled that the investors should only receive relief on 30% of their investment, not 100% as was claimed.


The result was a £700m tax bill for the many famous actors and footballers that invested with Ingenious.


In May 2017, Ingenious appealed the ruling but it was struck down, despite the judge admitting to having “misgivings and reluctance” over the decision.


A further appeal was lodged the following month.


A group of celebrities, including ex-Premier League footballers, launched their own case against the financial advisers who recommended the scheme in September.


They were unsuccessful.

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