A GROUP of film producers, accountants, financial advisers and investment bankers who attempted to cheat the tax system out of £2.2m have been jailed for more than 36 years after an investigation by HMRC.
The scheme involved claiming false tax rebates linked to contrived investments in film-making partnerships.
The partnerships claimed to have spent £5.7m and made significant financial losses on two UK film projects, ‘Starsuckers’ and ‘Mercedes the Movie’.
The losses enabled the wealthy investors to falsely claim back around £40,000 in tax relief for every £20,000 they had invested.
HMRC, which last week won a £1m VAT battle against an environmental charity, identified a series of suspicious tax rebate claims, which investigators discovered had originated from two fraudulent tax avoidance schemes that had been set up and managed by Monaco-based accountant Terence Potter. The claims were supported by false documents produced by Potter.
Potter devised and promoted the schemes to wealthy professionals and produced false documents in a bid to make the schemes look legitimate.
He was assisted by independent financial adviser, Neil Williams-Denton, who also promoted the schemes to high earning investment bankers.
Three investment bankers, Phillip Jenkins, James Hyde, and Hamish MacLellan, were each convicted of one count of Conspiracy to Cheat the Public Revenue, and sentenced to thirteen and half years in prison, collectively.
In the latest trial, two independent film producers, Chris Walsh Atkins, and Christina Slater, were convicted of Conspiracy to Cheat the Public Revenue, theft and fraud and sentenced to a total of nine years in prison. Their role in the fraud was to circulate money and produce falsely inflated invoices.
The majority of the tax refunds claimed by investors were withheld and £500,000 which had been paid out initially has since been recouped by HMRC.
Investigations to recover further proceeds of the crime are under way.
Simon York, director of HMRC’s Fraud Investigation Service said: “This was an audacious attempt to defraud HMRC and was motivated by the pure greed of dishonest and wealthy individuals. The majority of those involved in this fraud had no interest in the film industry, or regard for the impact of their criminality on honest taxpayers.
“After painstaking and complex work from our investigators, and a series of long trials, HMRC has dismantled the fraudulent operation, and shown that we have the intent and capability to bring criminals to justice regardless of their resources.”
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