A supreme court judge ruled against HMRC following a four year battle with Ingenious Media.
HMRC were also found to have breached its duty of confidentiality after a senior executive gave an off the record talk to The Times, during which he described film investment partnerships as ‘schemes for scumbags’.
Costs which could run into £5m have been awarded to Ingenious, who are also now deciding whether to seek compensation.
Ingenious Media, used by wealthy clients including celebrities, was founded by Patrick McKenna and was intended to minimise tax.
A HMRC spokesperson said: “Having earlier won this case in both the high court and court of appeal, HMRC is naturally disappointed by the judgment handed down by the supreme court.
“It is important to clarify that this judgment has no bearing on the three Ingenious film partnerships considered by the first-tier tribunal, where HMRC was successful. This protected around £400m in revenues for the exchequer.”
Ingenious declined to comment on whether it would now seek damages, or on how much compensation it might seek. The firm sold its investment management arm, which managed £1.8bn on behalf of its high net worth clients, to private equity earlier this year.
“What this isn’t about is restricting HMRC’s ability to collect taxes,” said the Ingenious chief executive, Neil Forster. “Nor is it about restricting the freedom of the press to pursue public interest stories. This is about the principle of protecting taxpayer confidentiality and ensuring that information isn’t used by HMRC contrary to its own guidelines in order to pursue relationships with the press.”