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08 Feb

Class action for footballers hit by tax schemes

Withers has a launched class action for footballers who face losing millions from investing in tax avoidance schemes.

The action group, which is open to other high profile, affluent celebrities caught up in these schemes, is being led by Tessa Lorimer, special counsel in Withers’ tax investigations team, and litigation partner Roberto Moruzzi.

The pair will work with action group specialists Litigation Management, which will provide funding and administrative expertise.

The news comes as football stars explore their options after a clampdown by HM Revenues & Customs (HMRC) on tax avoidance schemes.

HMRC has set an April 2016 deadline for investors in these schemes to repay any tax deemed to be avoided, with the tax office aiming to have reclaimed tax from around 33,000 individuals by this date.

HMRC is publishing information about their disclosure of tax avoidance schemes on its website and in many cases individuals and companies are issued with accelerated payment notices to ensure that the disputed tax is paid up front.

At the end of last year it emerged that a host of retired footballers lost more than £100 million through a film investment scheme that was sold through advisory firm Kingsbridge Asset Management.

The scheme was said to have at least 100 footballers on its books, including former Manchester United and England stars Rio Ferdinand and Andy Cole, ex-Arsenal players Kevin Campbell and Martin Keown, and Match of the Day pundits Danny Murphy and Robbie Savage.

Murphy said he felt ‘angry’ after claiming he was missold the scheme, while Campbell, who has filed for bankruptcy after losing £7 million, said: ‘when I see the paper work, it’s horrendous.’

It has since emerged that a number of English cricket stars, including Ashes heroes Andrew Flintoff and former captain Michael Vaughan, also lost fortunes investing in film schemes.

Withers believes that these high profile celebrities have a stronger case than most in claiming they were mis-sold these investments as they should never have been targeted by promoters in the first place.

‘Many footballers were targeted by promoters of marketed avoidance schemes as they are high earners who often rely on the advice of others to manage their finances,’ Lorimer said.

‘[However], these investments were designed for individuals who are familiar with financial products and, under the terms of the Financial Services and Markets Act, investors in these kinds of schemes must certify that they are “sophisticated”.’

She added: ‘Many footballers were either persuaded to self-certify, despite their unfamiliarity with the schemes, or had others certify on their behalf and therefore have good grounds for claiming that they were missold these schemes.”

‘The law firm believes that the options available to them, including High Court challenges and judicial reviews of HMRC’s decisions, are a ‘dead end’ that will not provide most investors with an effective and lasting resolution.

Read full City Wire article here.

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