The incoming chair of the Financial Conduct Authority (FCA) Charles Randell has said that his investment into a controversial tax avoidance scheme was 'an error of judgement'.
Randell (pictured) stated that he repaid £114,000 to HMRC and in a letter to the Treasury permanent secretary Tom Scholar, he said: ‘I had invested in a film production partnership promoted by my financial adviser in 2006, and 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.
'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.'
Scholar then wrote to Nicky Morgan, chair of the Treasury committee, saying the assessment panel 'was content that Mr Randell had taken appropriate action, and concluded that this should not prevent him from being appointed to the roles of chair of the FCA and PSR'.
The Ingenious Film Partners 2 LLP scheme attracted around 1,400 stars, including ex-Manchester United footballer Wayne Rooney, alongside other former football stars including David Beckham and Gary Lineker. TV double act Ant and Dec and ex-Newsnight host Jeremy Paxman were also among the scheme's backers.
The investors each paid a minimum of £100,000 into the scheme, which offered tax breaks in return for helping fund box office hits. Life of Pi, Avatar and Girl With a Pearl Earring were among the blockbuster films Ingenious helped bring to the big screen.
Randell's appointment to the FCA was confirmed in January and he is due to start in April. He is known for advising HM Treasury on the resolutions of Northern Rock, Bradford & Bingley and the Icelandic banks, as well as the government's investments into RBS and the merged Lloyds/HBOS, along with the Asset Protection Scheme in the aftermath of the financial crisis.