• Confirms timetable for appeal process
  • Clarifies the meaning of a recent “supplementary decision”, following misleading media reports

Ingenious, the leading independent investor in the creative industries and backer of hit movies including Avatar and Life of Pi, is to appeal against the judgement of the First-tier Tax Tribunal in its long-running dispute with HMRC over the tax status of its historic film production partnerships which date back as far as 2002.

This follows a recent supplementary decision handed down by Judge Charles Hellier in which he clarified a technical point from his original August 2016 judgement. In this clarification, the judge ruled “with misgivings and reluctance” that the film production costs were capital costs and therefore not tax deductible.

This decision was deliberately mischaracterised in press reports as a failed bid by Ingenious to overturn the August 2016 Tribunal decision. In fact, this latest development was triggered after the Tribunal, having found in favour of the Ingenious partnerships on the Tribunal’s basis of assessment, instructed the parties to agree a common approach in applying the judgement.

Ingenious believes this further decision compounds the errors made by the First-tier Tax Tribunal which simply reinforces the need to take this matter to a higher court. The appeal to the Upper Tribunal is likely to be heard during 2018 and Ingenious are confident of victory.

The Tribunal’s clarification of a technical matter has been presented in the media in a wholly-biased manner which misrepresents the facts and misleads the reader.

We strongly disagree with the Tribunal’s clarification and find it wholly unsatisfactory that the Tribunal reached this decision with “misgivings and reluctance”. We will be appealing the entire decision of the Tribunal.

This follows a recent successful appeal brought by Ingenious against HMRC which led to the judges of the Supreme Court unanimously ruling in favour of Ingenious that HMRC had acted unlawfully in a briefing to the press.

Neil Forster