HMRC’s further success in battle against fraud; the first conviction for film tax relief fraud

HMRC discovered that a film, ironically entitled ‘A Landscape of Lies’, and portrayed as starring Hollywood stars was never intended for the big screen and was in fact a sham. The motive instead was to defraud to the tune of £1.5m in VAT and approaching £1.3m in film tax credit claims.

Evolved Pictures presented its auditors with a budget exceeding £19m to be provided by a Jordanian investor company to produce the blockbuster in the UK.

Further as millions of pounds of work had been spent on the film, including paying actors and film set managers, it made representations for VAT repayments of £1,488,187. However, HMRC found that the work had not been done and most of the purported suppliers and film studios had never heard of the Evolved Pictures.

Compounding the extent of the fraud and attempting to capitalise on a scheme designed to support genuine British film makers, Evolved Pictures claimed tax credits of £256,385.50, while preparing to submit a further claim of £1,033,337.

In a bungled and unsophisticated attempt to cover its tracks the perpetrators shot a film on a budget called ‘A Landscape of Lies’, featuring two television personalities.

Sentencing and confiscation proceedings are in hand.

Film tax relief is only available to legitimate film makers for British films that are intended to be shown commercially in cinemas where at least 25 per cent of the production costs relate to activities in the UK.

The law and practice referred to in this article or webinar has been paraphrased or summarised. It might not be up-to-date with changes in the law and we do not guarantee the accuracy of any information provided at the time of reading. It should not be construed or relied upon as legal advice in relation to a specific set of circumstances.

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