Stars face massive payback demands as HMRC probes £2bn film tax loophole … Jeremy Paxman, Anne Robinson, Steven Gerrard, Wayne Rooney, Guy Ritchie and dozens of other celebrities invested up to £1.4m each. Dozens of Britain's highest paid celebrities and business chiefs have been caught up in an investigation into an alleged tax avoidance scheme. England soccer stars Wayne Rooney and Steven Gerrard, BBC presenters Jeremy Paxman and Anne Robinson, film-maker Guy Ritchie, pop star Peter Gabriel and Labour peer Lord Hollick were among those who pumped money into a fund that exploited a legal loophole giving tax benefits to those investing in the film industry. Documents seen by The Mail on Sunday suggest they invested sums ranging from £160,000 to £1.4million. Some other investors have already received tax demands for tens of thousands of pounds – big investors may face bills of more than £1million. – Daily Mail
Dominant Social Theme: The bigger they are the harder they fall.
Free-Market Analysis: What is it with Britain these days? Between the cameras at every street-corner, a sizeable and apparently secretly proposed VAT tax raise, the escalating debt and endless regulatory palaver, it's hard to see what else the British socialist leadership could do to make life tougher on its citizens. But it has found a way, we guess, by declaring a widely used and accepted tax break to be potentially illegal.
Britain in our estimation doesn't have a lot going for it these days. It tags along behind the United States, fighting me-too wars and bleating about a "special relationship." Its most important recent politician, Tony Blair, was just in the dock (sort of) blathering about his absolute devotion to the truth when it came to declaring why Britain went to war in the first place. And now, Britain is about to take a sledgehammer to the one part of the island that functions fairly well – its show people. Here's some more from the article:
Under a policy set up by Gordon Brown when he was Chancellor, investors could slash their tax bills if they backed the film industry. Around £2billion a year was subsequently invested in film funding schemes.
However, HM Revenue & Customs officials now believe that at least one £75million investment fund used by celebrities might have been aimed primarily at avoiding tax and not bolstering the British film industry, so was against the rules. Stars were partners in schemes run by finance company Ingenious Media, founded by chairman Patrick McKenna. The company has raised about £5billion to put into films over the past decade, including such hits as Avatar and X-Men. The key with many of these schemes was in the loan agreements. The loans were often provided on very favourable terms or on the basis they would only be repaid if the film made a profit.
HMRC said: "The tax breaks for investment in British films have been significantly reformed so that the relief goes where it was always intended to go – to those who produce films and employ talent.
"The loopholes which allowed the tax relief to be abused with no benefit to the film industry have been closed. If we find evidence of abuse we will take steps to put things right."
Ingenious has also told investors the HMRC enquiries are standard practice where tax relief has been claimed on losses. It said: "We remain confident we will be able to demonstrate that the partnership trade is conducted on a commercial basis and that partners are entitled to the benefits of the losses they have claimed."
It sounds a bit as if the HMRC has changed the rules and then decided to go on a fishing expedition to see if it can collect more funds. Britain once used to be a fairly lawful society – and in fact one that hewed to the most noble of legal disciplines – common law. Common law is private law and mostly civil. If two people have a quarrel, they seek redress of the local judicial system and may pay an agreed-upon price to do so. Now justice in Britain is state-based and in the case of the HMRC – the British tax collector – the agency not only sets the rules, it interprets them and prosecutes those it has decided have done wrong.
NOTED: Vice President Joe Biden (left) says Iraq war wasn't worth 'horrible price' … Vice President Joe Biden says the Iraq war hasn't been worth its "horrible price." He says the war was mishandled from the outset and that the U.S. took its eye off the ball. As a result, he says the U.S. was left in a more dangerous position in Afghanistan, where al-Qaida hatched the Sept 11 attacks. Biden tells NBC's "Meet the Press" that the war also has cost the United States support from other nations. – AP … (Ed Note: Was this intended to make the troops feel better?)
In Britain, if you defend your home from an intruder you can go to jail. You can be prosecuted for "tipping" – sneaking out your garbage and putting it somewhere else. You can be prosecuted — as one couple recently was — for having loud sex. Almost anything these days is prosecutable in Britain. And now Britain is preparing to attack entertainers for back taxes — while its politicians reportedly consider a huge increase in the British VAT. At some point, something in Britain is bound to give — as it seems to have in the EU. For many that prospect probably cannot come too soon.