Ingenious is pleased to announce that Impresario Festivals plc (‘Impresario’) has completed the sale of its portfolio of festivals South West Four, Field Day, Boardmasters and Rewind Festival for an undisclosed sum to Global, an established company in the live entertainment and touring sectors, as well as the radio sector, owning UK radio stations such as Heart, Capital, Classic FM and Smooth.

This transaction demonstrates the success of Impresario’s strategy to buy and grow a number of festival brands within the UK live events market.  Since its launch in 2012, average attendees per day at Impresario’s UK festivals have grown over 20% to over 25,230 and the portfolio of festivals sold attracted a combined audience of 350,000 in 2016 alone.  Featured artists include The Chemical Brothers, Dizzee Rascal, Rick Astley and Tony Hadley along with many other well-known names.

Five productions backed by Ingenious’ Ingenious Broadcasting service have been nominated in the 2016 British Academy Children’s Awards.

Clangers, an animated series following a family of aliens who live on a planet not far from earth, received two nominations; Best Pre-School Animation and Best Writer. The show is narrated by Michael Palin and airs on CBeebies. Ingenious’ Sarah & Duck is also nominated for Best Pre-School Animation.

High School entertainment show, So Awkward, received a nomination for Best Comedy Programme and both Topsy & Tim and Teletubbies have been nominated in the Best Pre-School Live Action category.

The ceremony will be held at the Roundhouse, London, on Sunday 20 November. See the full list of Nominees here. 

The Supreme Court has today unanimously ruled that HMRC unlawfully disclosed confidential information in an “off the record” background briefing of the press.

Commenting on the judgement given by the Supreme Court, an Ingenious spokesperson said:

“We are delighted that the Supreme Court has unanimously found in our favour.  This was never about restricting HMRC’s ability to collect taxes, nor was it about preventing the press from investigating public interest stories.  Consistent with HMRC’s own guidelines, this was simply about upholding the basic legal principle that HMRC owe a duty of confidentiality to each and every tax payer and their affairs should not form the subject of “off the record” background briefings to the media.”

Background

The case involved an “off the record” background briefing of the press in June 2012 by the then Permanent Secretary of HMRC, Mr Hartnett, at which Mr Hartnett supplied confidential information to two journalists.  The information disclosed was only tangentially related to the case before the First Tier Tax Tribunal and the film production partnerships which Ingenious operated.  This briefing took place during the ordinary course of an enquiry into their film production partnerships and despite the fact that they had been entirely transparent with HMRC about the structure and operation of the film production partnerships and had engaged and cooperated with HMRC for many years in relation to the partnerships.  The briefing took place before Ingenious had decided to commence legal proceedings at the First Tier Tax Tribunal.

HMRC sought to justify Mr Hartnett’s briefing on the basis that there was a general desire on the part of HMRC to foster good relations with the media and to publicise HMRC’s views regarding what they considered to be elaborate tax avoidance schemes.

However, the five judges of the Supreme Court unanimously decided that the arguments put forward by HMRC could not possibly justify a senior official, or any other official of HMRC, discussing the affairs of individual tax payers with journalists.  Neither did the judges accept HMRC’s defence that because Mr Hartnett did not expect his comments to be reported that he was justified in making them.  The judgement went on to say that the whole idea of HMRC officials supplying confidential information about individuals to the media on a non-attributable basis is, or should be, a matter of serious concern.

This landmark ruling is of wide spread public interest as it upholds the basic common law principle of confidentiality and in particular the duty of confidentiality which is owed by HMRC to individual tax payers.

For us, this case was not about preventing HMRC from undertaking their role as effectively as possible which is of course vitally important.  Nor was it about seeking to restrict important public interest stories which investigative journalists can do brilliantly well.  It was much simpler than that.  In providing an “off the record” background briefing to the press, HMRC abused their power by ignoring both their own guidelines and their common law obligation to each and every tax payer to keep their personal financial affairs confidential.

Today marks the opening of the 2016 BFI London Film Festival, featuring six Ingenious-backed films including Amma Asante’s A United Kingdom, which will open the festival.

A United Kingdom, starring David Oyelowo (Selma) and Rosamund Pike (Gone Girl), will make history today as the first film with a black female director to open the London Film Festival. A United Kingdom received its global premiere at last month’s Toronto Film Festival and was heralded as ‘unmissable’ and ‘triumphant’.  

The festival will also feature Autopsy of a Jane Doe starring Emile Hirsch and Brian Cox; City of Tiny Lights starring Riz Ahmed and Billie Piper; the critically acclaimed Dog Eat Dog starring Nicolas Cage and Willem Defoe; The Secret Scriptures starring Rooney Mara and Vanessa Redgrave; and Their Finest, starring Gemma Arterton and Bill Nighy.

The films, all due for release within the next six months, showcase some of the finest British and American talent and were backed by Ingenious’ Shelley Media, Pathé, Pathé Plus and Senior Film funds.

Having received its world premiere at Fantastic Fest, USA, on Sunday 25 September, Ingenious film Miss Peregrine’s Home for Peculiar Children has been praised as ‘breathtaking’ and ‘genius’ by The Times.

Based on Ransom Riggs’ bestseller and directed by Tim Burton, the film follows a lonely teen called Jake (Asa Butterfield) who, while grieving for his grandfather, stumbles into the magical world of Miss Peregrine (Eva Green). The mysterious half-bird, half-human runs a boarding school for supernatural children, or ‘peculiars’, on a remote island off the Welsh coast. As the peculiars take on the ‘forces of evil’, led by characters Barronand Ornothologist(played by Samuel L. Jackson and Rupert Everett) culminating in an epic battle in Blackpool, a beautiful romance blossoms between Jake and Emma (Ella Purnell), a peculiar who can manipulate air and will float away unless strapped into iron-clad platform sandals.

The film also stars Judi Dench, Chris O’Dowd and Terrence Stamp, and was released globally on 30 September 2016.

This week’s world premiere of Amma Asante’s A United Kingdom at the Toronto International Film Festival was met with critical acclaim from leading journalists, heralding the film as ‘unmissable’ and ‘triumphant’.

The Ingenious backed historical epic, starring David Oyelowo (Selma) and Rosamund Pike (Gone Girl), depicts the controversial marriage of Prince Seretse Khama of Botswana and British office worker Ruth Williams in the face of fierce international opposition. Having received a five star review from The Times, and four stars from The Guardian, the film will open the BFI London Film Festival on 5 October this year, the second consecutive year that an Ingenious backed film has opened the festival.

A United Kingdom is produced by Rick McCallum (Star Wars), David Oyelowo, Justin Moore-Lewy, Brunson Green (The Help) and Charlie Mason. Executive producers include Cameron McCracken (Pathé), Christine Langan (BBC Films), Ben Roberts (BFI), Eleanor Clark Windo (Ingenious Media) and Guy Hibbert.

On Friday morning a press release from Her Majesty’s Revenue and Customs (HMRC) wrongly and deliberately grouped the Ingenious judgement at the First Tier Tax Tribunal together with a proven tax avoidance scheme called Icebreaker leading to a number of misrepresentations in the media. Ingenious now finds itself compelled to set the record straight.

On Tuesday last week, the Tribunal ruled that Ingenious’s film partnerships were trading and that that trade was conducted with a view to profit. This vindicates Ingenious’ position which it has repeatedly stated over the last 10 years, that its film partnerships were bona fide businesses run for a commercial profit.

In contrast, the Upper Tribunal on Friday upheld the decision of the First Tier Tribunal that the Icebreaker scheme was not conducting a trade with a view to profit and as such was set up for the sole purpose of avoiding tax, drawing a clear distinction with the Ingenious case.

The HMRC release also contained a number of false assertions that have since been reported in the media. Whilst these may apply to the Icebreaker scheme, in the Ingenious case these are entirely false. Ingenious would like to make the following clarifications on the record:

1. The Ingenious investors received no more tax relief than the cash they invested. Furthermore, investors have incurred no legal costs in this fight, all of which have been paid for by Ingenious.

2. Although part of the tax relief on film costs has been disallowed, a corresponding proportion of film income will no longer be taxed. In the case of all our partnerships, this will result in less taxable income being brought into account than would otherwise have been the case.

3. As a result we believe investors are better off now than if they had accepted HMRC’s offer to settle four years ago, and considerably better off than the position HMRC had attempted to argue at the Tribunal which would have seen them receive no tax relief on their investment.

Neil Forster, Ingenious CEO, said:

HMRC appears to be deliberately confusing the Ingenious case with proven tax avoidance schemes and making assertions which are factually wrong.

The Ingenious investors received no more tax relief than the cash they invested. Furthermore, investors have incurred no legal costs in this fight, all of which have been paid for by Ingenious.

We are disappointed that the Tribunal has restricted tax relief on the costs of the films however believe that investors are better off as a result of this judgement than if they had accepted HMRC’s offer to settle four years ago, and considerably better off than the position HMRC attempted to argue for some years before the Tribunal which would have seen them receive no tax relief on their investment.

It is important to note that as well as the restriction on loss relief the Tribunal also ruled that the tax on film income should be restricted, reducing the amount of tax payable by investors.

We remain disappointed that the Tribunal decided to award film investors only partial loss relief and to restrict all loss relief for games investors. We are actively reviewing the judgement and considering an appeal to seek the maximum redress for our investors.

We are very proud of our track record in supporting the UK film industry and look forward to the release of our latest feature film, A United Kingdom starring David Oyelowo and Rosamund Pike, which opens the London International Film Festival in October.

Neil Forster

CEO

Notes to editors:

1. Founded in 1998 by Patrick McKenna, Ingenious has produced and co-financed hundreds of feature films and more than 550 hours of television programming with partners including 20th Century Fox, Sony Pictures, NBC Universal, Warner Brothers, Paramount Pictures, Disney, Lionsgate, Film4, Pathé, the BBC, ITV and Endemol Shine.

2. Ingenious is a serial investor in the global creative economy, having raised and deployed more than £9 billion across the creative sector, as well as in real estate and infrastructure projects.

We are pleased to report that, contrary to some press coverage, the Tribunal has drawn a clear distinction between our film production partnerships and other film-related arrangements which have appeared before the courts over the last couple of years.  In contrast with those cases, the Tribunal has found the Ingenious film partnerships to be trading and that those trades were conducted with a view to profit, although on a different basis to that which the partnerships argued before the Tribunal.

The argument that the partnerships were trading and were doing so with a view to profit is one which we have consistently maintained throughout both the enquiry process and litigation.

The purpose of this statement is to provide more detail about the Tribunal judgment. For investors and general readers alike, however, it should be clearly understood that, irrespective of this long-running and historic dispute with HMRC, the verdict of the Tribunal has no bearing whatsoever on any of our current business activities, whether they be EIS and Business Relief qualifying activities in media, or more widely in infrastructure and real estate.

The Tribunal concluded that none of the film partnerships were carrying on a trade with a view to profit on the bases argued by the partnerships. From our initial reading of the decision, this appears to be based on the Tribunal’s view that it was unrealistic, at the point of greenlighting (that is to say at the point of committing to produce each film), to hope that the films would be profitable. We strongly disagree, based upon the clear evidence that was presented to the Tribunal and the testimony of expert witnesses. The Tribunal itself concluded that there was at least a speculative hope of profit and that the films produced by the partnerships were capable of generating profits.

The Tribunal did however conclude that the partnerships were trading with a view to profit if production costs were restricted to 35% for Inside Track films and 30% for Ingenious Film Partners films, with taxable film income being restricted based on the same underlying principle – and that this approach to cost and income recognition should then form the basis for the preparation of the partnerships’ accounts.

We were therefore successful in pressing our case on a particularly important issue in front of the Tribunal, even though this success must be qualified in the manner described above.

In the case of Ingenious Games, we are extremely disappointed that the Tribunal concluded that the partnership was not trading and the partnership’s business was not conducted with a view to profit (on the basis that the partnership argued before the Tribunal). However, the partnership’s business was found to be conducted with a view to profit if game development costs were restricted to 30%, with taxable game income being restricted based on the same underlying principle. Again, we disagree.

In our opinion, certain of the Tribunal’s conclusions, as regards both our film partnerships and our games partnership, are based on a number of arbitrary and subjective interpretations and are unreasonable.

The broad impact of the adjustments made by the Tribunal is to reduce the trading losses allocated to investors and therefore reduce their ability to offset those losses against their tax liabilities in the relevant financial years.  The precise impacts will take some time to process, given the volume of adjustments required on a film by film (or game by game), year by year basis.  This process will also necessitate further discussion with HMRC, as directed by the Tribunal, which will inevitably take some time.

We are in the process of studying the detail of this very long and complex judgment (which runs to nearly 350 pages) and are actively considering the terms of an appeal. We have 56 days to start any appeal.

We will provide a more comprehensive update to investors once we have reviewed the fine detail of the judgment and determined the expected impact on partners’ tax returns, which will take several weeks.

In the first major tie-up of its kind between a UK media company and a Chinese fund backed by private and government investment, Ingenious, the London-based backer of last season’s Oscar contenders Brooklyn and Carol, as well global blockbusters Avatar and Life of Pi, has formed a joint venture with Hejing to produce and co-finance a slate of independent films in a deal worth $200 million.

This initial venture marks the first step in what Ingenious and Hejing hope will be a long running partnership between the two parties.

The deal comes just two years after a landmark UK-China co-production treaty was signed by Culture Minister, Ed Vaizey and SARFT’s (State Administration of Radio, Film & Television) Vice Minister, Tong Gang.

Ingenious has developed a reputation as a leading player in the global film and television industry over the last 18 years.

The global market for entertainment content is experiencing an exciting period of change – from the seismic shifts in individual consumption patterns to the unprecedented growth in China. Any long-term global growth strategy has to involve an alignment with the right kind of partners, and we couldn’t be more delighted to be working alongside Hejing to continue to bring high-quality entertainment to global audiences.

Neil Forster

CEO at Ingenious

As a leading culture company under the SARFT system (Chinese state administration for radio, film and TV production), Hejing has played a very important role in saving traditional Chinese culture by editing and republishing some of the most distinguished Chinese books from ancient times.  Now that we have collected and have ownership of such important Chinese stories and their associated rights, it’s time to go international and show the world the charm of Chinese content and Chinese story-telling.

We’re so honoured to launch this programme of internationalisation by partnering with Ingenious, a wonderful film company with an unbelievable track record. I truly believe we can co-develop some great western and eastern film and TV projects together.

Zhang Aiyi

CEO of Hejing Culture

The UK film industry is one of our greatest success stories, powered by the huge wealth of creative talent that exists in the UK, both on and off screen. It’s fantastic to see collaborations such as this come about as a result of the landmark UK-China co-production treaty.

Ed Vaizey

UK Minister of Culture

Read more at:

Financial Times

City AM

We are delighted that Jonathan Strange and Mr Norrell has won two Baftas at this year’s Television Craft Awards. The period drama, backed by Ingenious Broadcasting, took home trophies for Special, Visual & Graphic Effects and Production Design at the London ceremony on Sunday evening. 

The debut novel by British writer Susanna Clarke depicts an alternative history in which magic is widely acknowledged, but rarely practised. The series, which focuses on magician Mr Norrell (Eddie Marsan) and his apprentice Jonathan Strange (Bertie Carvel), investigates the nature of ‘Englishness’ and the boundaries between reason and unreason. 

The programme, which aired on BBC One in 2015, also received two further Bafta nominations as well as high praise from critics across the globe.