Intermediaries and IFAs “right across the country” are set to face legal action, according to lawyers behind a group action for mis-selling tax schemes to footballers.
Global law firm Withers said it hopes to bring a case to court this quarter and could put together a group of around 100 people who lost money – including footballers and managers who are “household names”.
The case involves people who were advised to invest in investments such as film schemes that were promoted as being tax efficient but were then contacted by HM Revenue & Customs with a hefty tax demand.
Roberto Moruzzi, litigation partner at Withers, said in some cases these products will have been mis-sold.
He said: “The common theme is these investments should be sold to sophisticated investors. They are not for footballers who are newly out of school.
“A lot of unscrupulous intermediaries made a lot of undisclosed commission out of it and a lot of the footballers tell the same story: they didn’t know what they were signing up to.
“Most of us wouldn’t know what we were signing up to when we were 18.”
Tessa Lorimer, special counsel in Withers’ tax investigations team, said the legal team was hoping to bring a case in the first quarter of this year because many of the people affected face an impending limitation on their ability to take legal action.
She said: “There are intermediaries right across the country who have been involved in tax avoidance schemes – some perfectly legitimately but a particular class of people who were sold this were clearly not sophisticated and this was not appropriate for them.”
Ms Lorimer, who declined to name her clients, added the case would focus on intermediaries with professional indemnity insurance that could cover any payout.
About a year ago HMRC sent out 33,000 letters to big names in sport, business and entertainment demanding unpaid tax.
Read the full FT Adviser article here.