Spokesperson says committee hearing was “completely unsatisfactory.”
“The PAC session was grotesque as will be apparent to anyone who watches the proceedings on TV or reads the transcript. It put me in mind of the Moscow show trials of 1936-38,” an angry Ingenious spokesperson has commented after last week’s Public Accounts Committee (PAC) Hearing into “Tax Avoidance: tackling marketed avoidance schemes.”
During the hearing, Patrick McKenna, Chief Executive, Ingenious Media, was repeatedly criticised and interrupted by the PAC Chair, Labour MP Margaret Hodge.
Ingenious has now responded after a session that a spokesperson describes “as completely unsatisfactory in every way.”
The company’s spokesperson has said that the bad-tempered session - a “crude exercise in theatrical politicking” - had effectively spoilt “what could have been a valuable opportunity to explore the relationship between tax incentives and film financing and thus assist in producing an informed report on a crucially important dimension of the business.”
In the wake of the PAC Hearing, Ingenious has issued a statement again disputing the idea that the company has ever marketed tax avoidance schemes.
“We are in the business of raising funds for the creative industries. Our record as a vital partner to the UK film production industries speaks for itself. The films our partnerships have funded include Avatar, Life of Pi, Shaun of the Dead, Hot Fuzz, and many other UK film industry successes,” the statement reads.
Ingenious also points out that the company has produced taxable income for the UK Exchequer of £600 million from its film partnerships with a further £1 billion of taxable income expected.
“It is baffling to have this activity classed as ‘tax avoidance’ – especially since our investments were structured following detailed discussions with HMRC itself at a time when the UK government was actively encouraging the growth of film production in this country through explicit tax incentives.”
“It is disappointing, too, to hear some lawmakers casting aspersions on the vital work we do for one of Britain’s remaining successful export industries. At a time when UK film projects are struggling to secure public and private funding, Ingenious partnerships are among the few sources of substantial funds available to the sector,” the Ingenious statement continued.
The company was at pains to point out that it sought and secured HMRC approval for its partnerships before marketing them.
In recent years, Ingenious partnerships have financed or co-financed 103 features ranging from Avatar and The Best Exotic Marigold Hotel to Shaun of the Dead and Vera Drake.
Ingenious also asserted that its funds were designed to “accord with not just the letter of the law but the spirit of the law.”
In the year ending April 2012, Ingenious posted £35 million profits, on which the company paid £8 million in UK corporation tax.
The company, which employs 200 people, describes itself as “an investment and advisory firm…with a a sector focus on media, sport, leisure and more recently clean energy.”
The company has again emphasised that it has always sought “a clear and constructive relationship with HMRC” and has suggested that the current “tough” pronouncements against investors have “more to do with politics than just or effective governance.”
The PAC Committee on tax avoidance is expected to deliver its report early in the New Year.