Offshore film scheme gang found guilty of £100m HMRC fraud

Added 6th June 2016

A group of financial advisers and accountants have been found guilty of operating a fraudulent tax avoidance scheme to scam the HM Revenue and Customs (HMRC) out of £100m (£145m, €128m), the UK tax office has revealed.

Offshore film scheme gang found guilty of £100m HMRC fraud

Accountant Keith Hayley, 64, and London-based advisers Robert Bevan, 53, and Anthony Charles Savill, 53, set up Little Wing Films to develop film projects.

In reality, the firm was the front for a scam that persuaded investors that for every £100,000 they put in, higher rate taxpayers would get £130,000 in tax repayments from HMRC.

The three men, who were found guilty at Birmingham Crown Court on 12 May, falsely claimed to have invested £275m into film projects to increase the scheme’s financial losses, which enabled investors to collectively claim around £100m in tax repayments.

Recovering investor repayments

Court documents from last year reveal that the film producers promoted the scheme to financial advisers who then in turn marketed it to their clients.

Over 275 investors such a footballers, investment banks and a pop star, deposited more than £76m into the scheme in the belief that they were helping the British film industry, while legitimately reducing their tax bill.

The UK tax department has confirmed that it will recover these repayments from the investors.

Described at an earlier hearing as the “principal architect of the scheme”, Chartered accountant and film producer Hayley allegedly made £8m, while Savill who recruited the investors benefitted to the tune of £13m. Meanwhile, Bevan scammed investors out of £5m.

The defendants are due to be sentenced at Birmingham Crown court on 24 June 2016.

HMRC investigation

Although, the gang claimed to have spent more than £250m on pre-production and development packages for film projects made in Monaco, a HMRC investigation discovered that they actually only cost £4m and had been created in Little Wing’s offices in London.

The fourth defendant, 65-year-old accountant Norman Leighton, has been found guilty of using his Monaco-based firm to perpetuate the deception that more than £250m was being spent on genuine activity in Monaco. He was paid £300,000 for his part in the scheme.

Offshore cover-up

Rather than investing in films, most of the money was recycled through a network of offshore companies owned by Hayley, Bevan and Savill and was used to finance the limited recourse loans made to investors, which made the scheme effective as a tax mitigation scheme.

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Monira Matin

Senior Reporter

Monira joined International Adviser in March 2016 from Informa Global Markets where she worked as a eurobond reporter for over two years, covering fixed income markets. She has previously held a number of editorial positions covering politics, insurance and technology. Monira has a degree in Journalism and Economics from City University.


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