English Premier League soccer stars face bills adding up to £250 million after pouring cash into a discredited tax avoidance scheme.
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Nearly 150 players are caught up in the scandal.
Many face financial ruin if they cannot pay the massive bills sent out by HM Revenue & Customs.
One former Manchester United household name pumped £33 million made up of cash and huge loans into the scheme, promoted by advisers Kingsbridge.
The scheme invested in making films that attracted tax relief.
By investing in the films, such as Disney’s Enchanted and other box office hits, government-backed schemes deferred paying tax on the investment for up to 15 years.
The schemes were popular in the early 2000s, but then Chancellor Gordon Brown pulled the plug on the opportunity, but advisers allegedly kept promoting them.
Typically, a player staked £100,000 in cash and borrowed £900,000 to make the investment up to 31 million.
One play sank £300,000 cash and £7 million in loans into the scheme and has a tax bill of £7 million.
The film scheme was never designed to evade tax, but to delay the payment.
Meanwhile, the income from the films would repay the loans and interest.
Lawyers say players from high-profile teams like Liverpool, Manchester United, Blackburn Rovers and Aston Villa have had tax demands from HMRC.
The bills are for 70% of the cash staked plus interest and penalties.
Demonised for avoiding tax
The players argue the claims are unfair as they have not had the money because income from the scheme went directly towards repaying the loans, even though that technically means the film cash generated was their income.
Stuart Cotton, of Investor Rescue Organisation which represents many of the players in their fight against paying the tax bills, said: “Footballers have been demonised over years for investments into tax avoidance schemes.
“The truth is most were not privy to how the arrangements work. The result of investing in such schemes is beyond comprehension at times.”
Kingsbridge, the firm advising on the scheme, went into liquidation in 2015.
Now, the players are trying to shift the financial blame to banks who lent them money to invests in the scheme and their former advisers.
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