Chartered accountant Terence Potter, who has been identified as the ringleader, is currently serving an eight-year sentence for attempting to steal £2.2m in the tax fraud.
His partner in crime was ex-IFA Neil Williams-Denton, who received a six-year jail term when both men were sentenced in December.
At a confiscation hearing on Friday, Southwark Crown Court ordered Potter to repay more than £1.8m, while Williams-Denton was handed a restitution order of £36,000.
The gang
Film producers Christina Slater and Christopher Atkins have been ordered to each pay back nearly £101,000 within three months or face another two years in jail.
The pair were sentenced to four years and five years in prison, respectively, in July 2016 for abetting the scam by creating false invoices.
On a separate charge unrelated to Potter and Williams-Denton, both were also sentenced to two years for cheating HM Revenue & Customs by inflating the costs of films and making claims under the Film Tax Credit scheme.
The sentences will run concurrently.
Three investment bankers – James Hyde, Phillip Jenkins and Hamish MacLellan – were also sentenced for taking part in the fraud at a separate trial in September 2016.
They do not appear to have been included in the confiscation order.
Tax avoidance
The HMRC investigation into the case, which involved over 100 officers, found that Potter devised and promoted, jointly with Williams-Denton, a number of fraudulent schemes, which were portrayed as being tax avoidance schemes exploiting tax loopholes.
However, they 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.
‘Crime never pays’
Simon York, director of HM Revenue and Custom’s (HMRC) fraud investigation service, said: “These people have already lost their liberty, after HMRC uncovered their audacious attempt to steal money that honest taxpayers across the UK have paid to fund public services.
“We have now gone further and ensured these criminals must pay back what they stole or face even more time behind bars and will still have to pay the money back.
“However far criminals go to hide the proceeds of their crimes we pursue every penny to ensure that tax crime never pays.”
