Today, over six pages, the Sunday Times has shown that a number of professional footballers face financial ruin because they participated in so-called film schemes.
If you were earning a lot of money during the late 90s and early 00s and had an IFA I can almost guarantee you would have been offered the opportunity to participate in a film scheme. They were sold – almost without exception – as opportunities for the wealthy to mitigate (less politely, cut) their tax bill.
It now looks as though film schemes will not deliver that result – although greater clarity will be brought to this question by a forthcoming Supreme Court appeal called Eclipse 35. (Transparency note: I am lead Counsel for Eclipse 35.)
I have a long standing, dual, interest in film schemes. First, I have been involved in litigating almost all – if not all – of them. Second, through a series of posts on this blog, I have written about the many interesting questions that they raise.
Writing here and here I sought to bring a more nuanced perspective to the question whether those who invest in film schemes are getting what they deserve. Writing here I examined the crowd-dynamic that lead so many to embark on tax avoidance schemes. I’ve also written on how you solve these problems here, here, here and elsewhere.
But the most important piece I have written is this one. In it I point the finger at a small group of real villains: some members of my own profession. I invite you to read it.
But the reason I write this morning is this.
I applaud the decision of the Sunday Times to give this story the prominence it deserves. The basic argument is that a number of footballers face financial ruin through no fault of their own. I have no doubt that that argument is right. And the story of working class kids who work hard and succeed as brilliant athlete or musicians but lose it all due to the actions of their advisers is familiar through the ages. But it continues to have a powerful resonance for me – and I suspect for many of you.
I have worked with the Sunday Times on this story, I am quoted in it, and I applaud it. But I do want to add an important postscript.
To focus on two financial advisers – named in the Sunday Times as David McKee and Kevin McMenamin – is to miss the broader story.
Tax barristers got rich through devising these schemes – and are not being held to account. I showed this here.
In that same post, I pointed out the promoters who devised these schemes may have made £100 million from a single idea. And although many of them may have been wound up, the individuals who ran them will have walked away with fortunes. It is very difficult to hold them to account as I pointed out here.
IFAs, too, have wound themselves up – and the individuals involved have walked away wealthy.
And Government too has achieved its policy objectives.
(that’s an extract from this Decision). The very films Government sought to encourage were made – but Government has (in some cases at least) refused to honour its side of the clear and explicit bargain it struck with investors. I have explored this theme in more detail here.
So it’s not just David McKee and Kevin McMenamin – about whom I know nothing beyond that which is reported in the Sunday Times – whose conduct is amenable of criticism. Everyone involved – those who created the environment for these schemes, those who devised them, advised on them, administered them, and sold them – bears a share of the blame.
And they also share responsibility for the plight of the victims at the bottom.
I’ve tried in leaden-footed legalese to express this sentiment.
But don’t waste your time. Listen instead to Dylan on Who Killed Davey Moore.Follow @jolyonmaugham