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Film tax fraudsters jailed.

A gang found guilty of making a film solely as a £2.8 million tax scam has been sentenced in the first prosecution for film tax relief fraud.

HMRC investigators found that the film, A Landscape of Lives, which it was claimed starred Hollywood A-list actors, was never intended for the big screen and was a sham production. The real intent was to defraud the public purse of nearly £1.5 million in VAT along with nearly £1.3 million in film tax credit claims.

The owners of Evolved Pictures told their auditors that they had a budget of more than £19 million, provided by a Jordanian company, to produce a blockbuster film in the UK.

They also told HMRC that millions of pounds of work had been spent on the film, including paying actors and film set managers, claiming this meant a VAT repayment was due of £1,488,187. However, during checks HMRC found that the work had not been done and most of the so-called suppliers and film studios had never heard of the gang. Furthermore, capitalising on a scheme designed to support genuine British film makers, Evolved made fraudulent tax credit claims of £256,385.50, while preparing to submit a further claim of £1,033,337.

After they were arrested, the gang came up with an elaborate plan to cover their tracks and hide the fraud by shooting a film on a shoestring, called A Landscape of Lies, featuring two television personalities.

John Pointing, Assistant Director of Criminal Investigation at HMRC, said:

“This gang thought they could exploit rules for genuine British filmmakers and thieve from the public purse for their own gain. They were wrong.”

Stuart Coleman, Manager of the Tax Department of ABDS comments:
 “Film tax relief is administered by HMRC and is available to legitimate film makers for British films that are intended to be shown commercially in cinemas and of whose total production costs at least 25 per cent relates to activities in the UK.”

If you need any help and advice for your business on Corporation Tax or VAT contact Lavinia Newman, Stuart Coleman or Tonmoy Kumar to discuss how ABDS can help

ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900  E-mail: abds@netaccountants.net

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