IFA convicted in film tax fraud trial
AN independent financial adviser from Bolton has been convicted for his part in a £2.2m tax fraud linked to the film industry.
Neil Williams-Denton, 42, from Greenmount, actively sold and promoted tax avoidance schemes to wealthy individuals. He was found unanimously guilty of two counts of Conspiracy to Cheat the Public Revenue at a trial at Snaresbrook Crown Court.
He was arrested after an investigation by HM Revenue and Customs, identified Singapore-based accountant Terence Potter, 55, as the architect of the fraud.
Potter was a former partner of Ernst & Young, the accountancy firm, and former chairman of the South Wales branch of the Chartered Institute of Taxation.
The court heard that devised and sold a number of fraudulent schemes to wealthy professionals, which were portrayed to HMRC as being tax avoidance schemes exploiting legal loopholes. However, the bogus schemes were fraudulently underpinned by false documents, making them tax evasion.
Potter set up two partnerships that were sold to the wealthy investors. One produced a film called ‘Starsuckers’, the other was a project to develop a package to be made into a film by others called ‘Mercedes the Movie’. Together both partnerships claimed to have spent £5.7m on the projects. This created artificial losses that allowed the investors to claim back PAYE tax they had paid.
The partnership declared the losses in its tax return and so did the investors, which would have allowed them to recoup up to £40,000 in tax relief from HMRC, for every £20,000 they had invested. However, as the scheme was illegal their claim for tax relief was false. The claims were supported by false documents produced by Potter.
Jennie Granger, director general of enforcement and compliance at HMRC, said: “This was pure greed by a dishonest tax agent, a financial adviser, and people who were already wealthy individuals. Those found guilty had no interest in the film industry, or regard for the impact on honest taxpayers.
“While it started with a tax adviser pushing a deeply fraudulent tax scheme, wealthy professionals investing in such schemes should be aware of the pitfalls. Those found guilty believed they were above the law, cheating the system by masking tax fraud as investment in films. “
In a previous trial, which can only now be reported as restrictions have been lifted, three investment bankers, James Hyde, Phillip Jenkins and Hamish MacLellan were sentenced for taking part in the fraud.
Their trial took place in September and all received jail terms.
More than 100 officers from HMRC took part in the operation that led to the arrests in February 2012. Eighteen properties were searched and computers, business records and mobile phones were seized.
Williams-Denton and Terence Potter were remanded in custody and will be sentenced on December 18.
