Incoming FCA chair’s ‘error of judgment’ over Ingenious investment

Charles Randell, who is the incoming chair of the Financial Conduct Authority (FCA), has admitted ‘an error of judgement’ which saw the former magic circle lawyer and government adviser end up paying £114,000 to HMRC after investing in a controversial tax avoidance scheme

In a letter to the Treasury committee, which has oversight of the appointment, permanent secretary Tom Scholar said the department was aware of Randell’s membership of a film production scheme at the time he was considered for the job, but concluded he had ‘taken appropriate action’ and that this not prevent him from being appointed to the roles of chair of the FCA and Payment Systems Regulator (PSR).

Randell, who is due to take up his new role on 1 April, confirmed to the committee that he had told the interview panel about his investment in Ingenious Film Partners 2 LLP. This tax avoidance scheme, used by a number of high profile celebrities and City investors, has been subject to challenge by HMRC.

In his letter, Randell said that ‘despite assurances from my adviser and the managers of the partnership that HMRC were content with the partnership arrangements, HMRC subsequently opened an inquiry into the partnership tax affairs.’

He went on to state: ‘ I also explained that I had fully settled my tax affairs in relation to the partnership, by repaying as requested by HMRC an amount of tax relief originally granted by them. I also confirmed that I had withdrawn from the partnership.

‘The amount repaid to HMRC, which was not discussed at the interview, was approximately £114,000 plus interest.’

In conclusion, Randell, who was previously a partner with Slaughter and May specialising in corporate finance law, and is currently an external member of the Prudential Regulation Committee of the Bank of England and a non-executive board member of the Department for Business, Energy and Industrial Strategy, stated: ‘I told the panel that I considered that my decision to invest in this partnership was an error of judgment which I regretted.

‘I did not elaborate on this at the interview but I regret failing to independently investigate the assurances I received that HMRC were content with the partnership arrangements.’

Treasury committee correspondence relating to Charles Randell’s appointment is here.

Report by Pat Sweet

Pat Sweet |Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

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