I generally hate hearing about these rip off type schemes, but to hear it might involve Danny Money, I mean Murphy....
He's so money orientated. He's on Alan Brazil's talk sport breakfast from time to time and I remember him discussing his home with Henk Potts the business correspondent. They're both out Cobham way and were back slapping one another on the prestige of their areas. Doing it in a banter type way but you can tell he's the sort to brag about his wealth etc.
Still haven't forgotten that comment to one of our staff about the value of his watch being more than she earns in a year (I think).
So Kevin Campbell had £7m to lose? Why did he need to invest it then? Could've lived quite comfortably on that for the rest of his life. Greedy bastards , tough titty.
So Kevin Campbell had £7m to lose? Why did he need to invest it then? Could've lived quite comfortably on that for the rest of his life. Greedy bastards , tough titty.
The film related investment schemes offered huge tax savings BUT by the very nature of movie productions and the chance of the paying audience prepared to shell out their hard earned to see said movie, the underlying investment is extremely high risk.
If you are sufficiently motivated by the huge tax refunds then you must be aware that there's no such thing as something for nothing and consequently the value of your investment can go down (nay disappear) as well as up.
The fact that HMRC applied to the Courts who confirmed that these schemes were artificial and are demanding back the tax refund is clearly indicated in the prospectus.
When the Financial Services Act came into being the then head Lord Elton (no not Ben) made a keynote speech which he started with the age old adage "a fool and his money is easily parted but he should not be fooled out of his money".
The fact that these highly (over) paid young men allowed themselves to be fooled out of their money by their greed to avoid their taxes is the supreme irony.
Danny says he is very angry! Well the only person he should be angry with is the bloke who was so greedy that he didn't want to pay taxes when earning a million plus a year.
So Kevin Campbell had £7m to lose? Why did he need to invest it then? Could've lived quite comfortably on that for the rest of his life. Greedy bastards , tough titty.
The film related investment schemes offered huge tax savings BUT by the very nature of movie productions and the chance of the paying audience prepared to shell out their hard earned to see said movie, the underlying investment is extremely high risk.
If you are sufficiently motivated by the huge tax refunds then you must be aware that there's no such thing as something for nothing and consequently the value of your investment can go down (nay disappear) as well as up.
The fact that HMRC applied to the Courts who confirmed that these schemes were artificial and are demanding back the tax refund is clearly indicated in the prospectus.
When the Financial Services Act came into being the then head Lord Elton (no not Ben) made a keynote speech which he started with the age old adage "a fool and his money is easily parted but he should not be fooled out of his money".
The fact that these highly (over) paid young men allowed themselves to be fooled out of their money by their greed to avoid their taxes is the supreme irony.
Danny says he is very angry! Well the only person he should be angry with is the bloke who was so greedy that he didn't want to pay taxes when earning a million plus a year.
Funny how investments are only alleged to have been missold after they've lost money.
Very, very true.
In short these players are accusing their advisers of:
a) investing in tax efficient UK film schemes, b) borrowing money to increase their film investments (in order to maximise the tax rebate and effectively pay no or little tax at all on their income), c) organising sufficient security for the above borrowing (presumably collateralised against their homes), and d) not telling them that any of the above was occurring (despite almost certainly needing all sorts of signatures and consents along the way).
Seems a bit of a tall story to me.
Interestingly meanwhile Sir Chris Powell is (or has previously been) a member of some of these film partnerships such as Inside Track 1 LLP. Hopefully he's been better 'advised' than some of those named in the Sunday Times article.
This is what bankrupted Keith Gillespie, it's easy to laugh at those who are a lot more wealthy than us but this also highlights how there is always a bigger and nastier fish.
For what it's worth I don't completely blame young men giving 40% of every pound they make above 41,000 a year for investigating ways of making their money go further.
A lot of people always make the analogy about how we would all move jobs if offered a 200% pay rise and how we must remember these blokes have a limited earning window.
Moral of this story is a fool and their money are easily parted, there are plenty of legitimate ways of investing money and securing your future especially for people with as much disposable income as your common premier league footballer
The film schemes per se are not necessarily a bad concept (whether financially or culturally) and not particularly different from various other tax efficient ways of investing (eg. EIS, VCT).
However leveraging these risky investments and then investing the (higher) tax rebates in speculative property is the investment equivalent of pouring petrol on a fire.
I thought Gillespie spunked all his money at the bookies.
His disposable income yes; whether or not I believe him in that he says he only spent what he had after having a scary reminder at Newcastle that bookies don't take kindly to bad debt. But he put money into this scheme or comitted money to it but of course he was then liable to HMRC for an amount that increased year on year yet his own earnings were headed south.
In their defense, if you read books like the secret footballer, most footballers at that level have so much money that they can't spend or invest it as quickly as they earn it.
There was always going to be some 'clever' chap that was going to 'help' them 'invest it'.
I have been approached by a firm that does just this sort of thing. Worse still they also offer to invest your whole pension find in property in Eastern Europe. The commission payments that I would earn for recommending them to my clients were outstanding. When something seems too good to be true it normally is. However, the average Premier League footballer's life is, genuinely, too good to be true so I can see how they would fall for something like this.
In their defense, if you read books like the secret footballer, most footballers at that level have so much money that they can't spend or invest it as quickly as they earn it.
There was always going to be some 'clever' chap that was going to 'help' them 'invest it'.
I have been approached by a firm that does just this sort of thing. Worse still they also offer to invest your whole pension find in property in Eastern Europe. The commission payments that I would earn for recommending them to my clients were outstanding. When something seems too good to be true it normally is. However, the average Premier League footballer's life is, genuinely, too good to be true so I can see how they would fall for something like this.
Any sensible accountant or (reputable) adviser would just tell them to plonk any excess cash in a low-cost diversified 'balanced' fund until they can find some better use for it, tax efficient or otherwise.
Let's get this straight, as much as Murphy is a cock if you took him - and the fact that we are talking about footballers - out of the equation would peoples attitudes be any different?
If you won £1million on the lottery tomorrow then (if you were even reasonably sensible) you would probably look to invest at least some of it for your/your family's future. Yes?
And if that's the case wouldn't you want to invest it where it will get the "best" return for you in your own personal circumstances? For some that will involve sticking it in the bank and getting some shitty return, but others would want to be a bit more adventurous.
Add to that the fact that you don't know anything about finances or financial products - you're a footballer/pensioner/binman after all - then you would probably want to take some advice from somewhere.
People turning this into some sort of "greed" issue are a long way wide of the mark IMHO. It kinda reeks of jealousy to an extent.
Rubbish - these types of scheme are about all greed - they always have been. And people are sucked in with the promise of easy money.
There are plenty of ways to invest and guarantee a decent return, even Government Bonds provide you with a interest rate comfortably over the rate of inflation.
The greed can be illustrated in a simple example which is probably not far from the truth in some cases:
- successful Premiership player earns £2m pa and receives £1.2m net of tax after 40% PAYE; - player wants to 'earn back' say £500k of tax paid via a 25% tax rebate from film schemes - this requires a total investment of £2m; - player borrows say an additional £1.5m (funding £500k out of taxed income), probably secured by his home (or homes) and invests £2m in the tax schemes; - player receives the £500k tax refund via his tax returns and with the 'bonus' extra cash invests in £2m of properties (in Florida or wherever) at 75% loan-to-value.
So the player could have settled for £1.2m net in cash, sufficient for a luxury lifestyle with plenty left over for long-term savings.
Instead he ends up with:
- £700k of taxed income left over (to pay for cars, holidays, wife/kids and mortgage payments etc.); - £2m of investment in highly speculative UK films (with risk HMRC rules them a sham); - £2m of speculative Florida property; - £3m of additional mortgage debt.
I don't agree with the ethics of schemes and investment speculative plans like this mainly because I'm not wealthy enough to be asked to participate. I wouldn't be as cynical to call it greed though.
We live in a free market economy and schemes like this make up a chunk of that. It's like any investment that is with risk. Or put another way like any gamble.
If you can afford to lose then go for it, if you can't then play it safe and put your money in UK property and bonds and hire a good tax lawyer on the QT.
We're not talking about cut-throat investment bankers playing with other people's money. This is young men, none of whom are known for their intelligence or worldly experience being talked into a 'too good to be true' opportunity who are ultimately thinking of making their considerable short term earnings last beyond their next contract. I don't have any real sympathy for them as I don't know them personally but I've got more sympathy for them than I have your common or garden investment banker playing and losing sums of money that does not belong to them.
I have very little sympathy for these people, they are not fools. A few of them would have you believe that they're the font of all knowledge. Not so clever now.
The films were great successes, there wasn't much risk, they didn't lose money on their investments.
What didn't work was setting up a bogus business alongside the investment as a device to avoid tax on the profits from their investment. The business set up was guaranteed to make a loss. The investors' made a nice profit from their investment, which was topped up with a loan from Ingenious to increase the tax rebate. They avoided tax on the profits by offsetting the profits against the losses on the bogus companies.
The "loss" is paying tax they thought they had avoided, including tax on profits generated from the money loaned by Ingenious. It was known all along that HMRC had the potential to deem it a tax avoidance scheme and had neither confirmed nor denied it was a legitimate scheme until 2014 it was declared a tax avoidance scheme.
If setting up a business guaranteed to make a loss sounds sensible, so be it, and paying taxes on your profits isn't really making a "loss" just because you thought you wouldn't have to pay any.
Let's get this straight, as much as Murphy is a cock if you took him - and the fact that we are talking about footballers - out of the equation would peoples attitudes be any different?
If you won £1million on the lottery tomorrow then (if you were even reasonably sensible) you would probably look to invest at least some of it for your/your family's future. Yes?
And if that's the case wouldn't you want to invest it where it will get the "best" return for you in your own personal circumstances? For some that will involve sticking it in the bank and getting some shitty return, but others would want to be a bit more adventurous.
Add to that the fact that you don't know anything about finances or financial products - you're a footballer/pensioner/binman after all - then you would probably want to take some advice from somewhere.
People turning this into some sort of "greed" issue are a long way wide of the mark IMHO. It kinda reeks of jealousy to an extent.
Karma rather than jealousy I think given the way he allegedly belittled somebody less financially fortunate on the non-football side when a Charlton player.
Comments
Greedy feckers. Haven't they milked enough out of us poor mug football fans to live a very comfortable life?
But no. They want more. And they want it as easy as they got it when they were kicking a football around.
You gambled. You lost. Tough shit.
He's so money orientated. He's on Alan Brazil's talk sport breakfast from time to time and I remember him discussing his home with Henk Potts the business correspondent. They're both out Cobham way and were back slapping one another on the prestige of their areas. Doing it in a banter type way but you can tell he's the sort to brag about his wealth etc.
Still haven't forgotten that comment to one of our staff about the value of his watch being more than she earns in a year (I think).
If you are sufficiently motivated by the huge tax refunds then you must be aware that there's no such thing as something for nothing and consequently the value of your investment can go down (nay disappear) as well as up.
The fact that HMRC applied to the Courts who confirmed that these schemes were artificial and are demanding back the tax refund is clearly indicated in the prospectus.
When the Financial Services Act came into being the then head Lord Elton (no not Ben) made a keynote speech which he started with the age old adage "a fool and his money is easily parted but he should not be fooled out of his money".
The fact that these highly (over) paid young men allowed themselves to be fooled out of their money by their greed to avoid their taxes is the supreme irony.
Danny says he is very angry! Well the only person he should be angry with is the bloke who was so greedy that he didn't want to pay taxes when earning a million plus a year.
Dick head or what!
a) investing in tax efficient UK film schemes,
b) borrowing money to increase their film investments (in order to maximise the tax rebate and effectively pay no or little tax at all on their income),
c) organising sufficient security for the above borrowing (presumably collateralised against their homes), and
d) not telling them that any of the above was occurring (despite almost certainly needing all sorts of signatures and consents along the way).
Seems a bit of a tall story to me.
Interestingly meanwhile Sir Chris Powell is (or has previously been) a member of some of these film partnerships such as Inside Track 1 LLP. Hopefully he's been better 'advised' than some of those named in the Sunday Times article.
For what it's worth I don't completely blame young men giving 40% of every pound they make above 41,000 a year for investigating ways of making their money go further.
A lot of people always make the analogy about how we would all move jobs if offered a 200% pay rise and how we must remember these blokes have a limited earning window.
Moral of this story is a fool and their money are easily parted, there are plenty of legitimate ways of investing money and securing your future especially for people with as much disposable income as your common premier league footballer
However leveraging these risky investments and then investing the (higher) tax rebates in speculative property is the investment equivalent of pouring petrol on a fire.
There was always going to be some 'clever' chap that was going to 'help' them 'invest it'.
I have been approached by a firm that does just this sort of thing. Worse still they also offer to invest your whole pension find in property in Eastern Europe. The commission payments that I would earn for recommending them to my clients were outstanding. When something seems too good to be true it normally is. However, the average Premier League footballer's life is, genuinely, too good to be true so I can see how they would fall for something like this.
If you won £1million on the lottery tomorrow then (if you were even reasonably sensible) you would probably look to invest at least some of it for your/your family's future. Yes?
And if that's the case wouldn't you want to invest it where it will get the "best" return for you in your own personal circumstances? For some that will involve sticking it in the bank and getting some shitty return, but others would want to be a bit more adventurous.
Add to that the fact that you don't know anything about finances or financial products - you're a footballer/pensioner/binman after all - then you would probably want to take some advice from somewhere.
People turning this into some sort of "greed" issue are a long way wide of the mark IMHO. It kinda reeks of jealousy to an extent.
There are plenty of ways to invest and guarantee a decent return, even Government Bonds provide you with a interest rate comfortably over the rate of inflation.
- successful Premiership player earns £2m pa and receives £1.2m net of tax after 40% PAYE;
- player wants to 'earn back' say £500k of tax paid via a 25% tax rebate from film schemes - this requires a total investment of £2m;
- player borrows say an additional £1.5m (funding £500k out of taxed income), probably secured by his home (or homes) and invests £2m in the tax schemes;
- player receives the £500k tax refund via his tax returns and with the 'bonus' extra cash invests in £2m of properties (in Florida or wherever) at 75% loan-to-value.
So the player could have settled for £1.2m net in cash, sufficient for a luxury lifestyle with plenty left over for long-term savings.
Instead he ends up with:
- £700k of taxed income left over (to pay for cars, holidays, wife/kids and mortgage payments etc.);
- £2m of investment in highly speculative UK films (with risk HMRC rules them a sham);
- £2m of speculative Florida property;
- £3m of additional mortgage debt.
We live in a free market economy and schemes like this make up a chunk of that. It's like any investment that is with risk. Or put another way like any gamble.
If you can afford to lose then go for it, if you can't then play it safe and put your money in UK property and bonds and hire a good tax lawyer on the QT.
We're not talking about cut-throat investment bankers playing with other people's money. This is young men, none of whom are known for their intelligence or worldly experience being talked into a 'too good to be true' opportunity who are ultimately thinking of making their considerable short term earnings last beyond their next contract. I don't have any real sympathy for them as I don't know them personally but I've got more sympathy for them than I have your common or garden investment banker playing and losing sums of money that does not belong to them.
What didn't work was setting up a bogus business alongside the investment as a device to avoid tax on the profits from their investment. The business set up was guaranteed to make a loss. The investors' made a nice profit from their investment, which was topped up with a loan from Ingenious to increase the tax rebate. They avoided tax on the profits by offsetting the profits against the losses on the bogus companies.
The "loss" is paying tax they thought they had avoided, including tax on profits generated from the money loaned by Ingenious. It was known all along that HMRC had the potential to deem it a tax avoidance scheme and had neither confirmed nor denied it was a legitimate scheme until 2014 it was declared a tax avoidance scheme.
If setting up a business guaranteed to make a loss sounds sensible, so be it, and paying taxes on your profits isn't really making a "loss" just because you thought you wouldn't have to pay any.