The British tax man has blown the whistle on £200 million of investments in a renewable energy firm by leading sports stars and celebrities.
HM Revenue & Customs (HMRC) is investigating Elysian Fuel, a suspected tax avoidance scheme sheltering millions of pounds in earnings from hundreds of household name stars.
Accountants and advisers for the stars, including former Liverpool and current Real Madrid soccer manager Rafael Benitez, goalkeeper Carlo Cudicini and former snooker world champion Stephen Hendry.
Their names have been highlighted among 1,500 investors in the scheme.
They could all now face accelerated payment notice demands for any tax deemed avoided in the scheme plus fines equal to the amount invested and interest from the date any tax was due.
HMRC asking questions
Each investor bought at least £50,000 of shares in Elysian Fuels.
The scheme was run by Future Capital Ltd, which was also the name behind another ill-fated celebrity tax avoidance scheme that numbered former Manchester United manager Alex Ferguson on its roll of investors.
The scheme appears to have been based on buying the shares and then wrapping them in a pension plan.
HMRC has confirmed all investors in the project have received letters asking about the details and terms of their transactions.
Other stars known to have invested are cricketer Anthony McGrath, former England all-rounder who also player for Yorkshire; Graham Stuart, a former Everton and Chelsea footballer and Keith Senior, the Great Britain, England and Leeds Rhinos player.
Double blow for investors
The tax crackdown is a double blow for the investors as the Elysian Fuels project was a company in the oil and gas sector – and the price of oil has tanked from $100 a barrel a year ago to around $50 a barrel today.
The shares are expected to be worthless regardless of the cash raised by the project.
Tim Levy, director at Future Capital Partners director Tim Levy said: “Sadly the dramatic fall in oil prices, together with the difficulties in the UK getting government support for appropriate legislation, have made this project more commercially challenging in the last 12 months. That is what can happen in business.”