Celebrities including David Beckham, Gary Lineker and Ant and Dec have lost a legal challenge over a £700million tax bill.

The quartet were among a group of stars who invested in partnerships run by controversial finance firm Ingenious, and each paid a minimum £100,000 to support a movie venture that promised to combine box office hits with tempting tax breaks.

The Ingenious Film Partners 2 LLP scheme qualified for tax breaks under rules designed to stimulate the British film industry, with hit movies such as Life of Pi, Avatar and Girl With a Pearl Earring qualifying for tax relief.

David Beckham, left, and Gary Lineker, right, are among a group of stars who face a collective £700million tax bill over a controversial film investment scheme

But HMRC argued such schemes were not legitimate investment opportunities but actually a means of avoiding tax. The Tribunal however considered that the film partnership in question was legitimately trading with a view to profit, unlike many film schemes which had come before the courts previously. The Tribunal has now clarified a technical point on whether the film partnership’s expenditures were capital or revenue, as a result confirming the incentives were 'not allowable deductions'.

It means 1,400 people who invested – including Wayne Rooney, Bob Geldof, Davina McCall and Jeremy Paxman – face paying back millions of pounds.

A source told The Sun: 'This is a massively significant ruling. It has protected around £420million of taxpayers' money.

'Add on the interest and the total comes to around £700million.'

Ant & Dec, pictured, were also among the famous faces to invest in Ingenious, which lost a tribunal battle with HMRC, who said its tax breaks amounted to avoidance

Many of Ingenious's investors subsequently claimed they were wrongly advised to enter the schemes without being made aware of the risks involved.

A spokesman for HMRC said: 'We are pleased that the Tribunal has agreed with us that the vast majority of what was claimed in tax relief by Ingenious investors was simply not due.

'Anyone who anticipates problems paying their tax bill should contact HMRC, who may be able to offer extra time to pay based on individual circumstances.

'HMRC has an outstanding record for supporting those facing genuine difficulty.'

A spokesman for Ingenious confirmed it would be appealing the ruling.

The spokesman said: 'We strongly disagree with the Tribunal's clarification of a technical matter from its summer 2016 ruling.

'It is wholly unsatisfactory that the Tribunal reached this decision with "misgivings and reluctance".

'We will be appealing the entire decision of the Tribunal.'

Since first publication of this article a number of amendments have been made to clarify the status of the decision of the First Tier Tax Tribunal dated 17 May 2017.