Ingenious Media tax confidentiality appeal dismissed

AN ALLEGED BREACH of the confidentiality of Ingenious Media and its chief executive by HM Revenue & Customs has been dismissed at the Court of Appeal.

The case centres around an off-the-record background briefing that took place in 2012 between Times journalists Alexi Mostrous and Fay Schlesinger and then-HMRC permanent secretary for tax Dave Hartnett (pictured). The primary purpose of the meeting was to brief the journalists on tax avoidance, which led to the activities of Ingenious and its CEO Patrick McKenna being discussed in reference to the emergence of film investment avoidance schemes.

Mostrous and Schlesinger eventually used some of the information in a story, alerting McKenna and Ingenious, and prompting them to challenge HMRC over what they considered to be a breach of taxpayer confidentiality.

In 2013, the High Court struck out the claim on the basis it was off the record, and Hartnett could then reasonably expect the information would not be disseminated. Not only that, but Hartnett and HMRC had been “approached by apparently responsible journalists from a reputable newspaper, who made clear their interest in discussing tax avoidance schemes…and also made clear that they had a good background knowledge of their own about the subject”.

The discussion of Ingenious Media and McKenna took place after it was clear that the journalists were aware of McKenna’s identity and involvement in film investment schemes, and Hartnett did not pass to the journalists any information which Ingenious and McKenna had provided to HMRC about their affairs.

As such the case was dismissed, a ruling upheld this week by the Court of Appeal.

In a statement following the ruling, HMRC said it takes its “responsibility to keep taxpayer data confidential extremely seriously and will continue to do so”.
Ingenious, however, expressed its “disappointment” in the ruling.

“We… are amazed by the apparent ruling by the Court of Appeal that HMRC may disregard their own protocols regarding disclosure of individual taxpayer information to the media,” it said in a statement. “This outcome is inconsistent with the position HMRC itself has adopted when refusing to comment on named taxpayers when being examined by Parliamentary Select Committees. We will be studying the judgment closely and considering our next steps.”

The firm has been at loggerheads with HM Revenue & Customs regularly in recent years, with Ingenious insisting its partnerships were bona-fide vehicles involved in the production and marketing of films.

Most notably, Ingenious Film Partners 2’s investors put in a minimum of £100,000 to help to fund films such as Life of Pi, Avatar and Girl With a Pearl Earring, but HMRC contested it did not deliver the tax relief it claims to and instead is an avoidance regime. Ingenious has always denied the accusation.

A tribunal hearing is set to take place in the coming months to consider the schemes.