News
Jessica Fino 5 Jun 2018 11:19am

Four people charged in Formula 1 film tax scam

HMRC has sentenced a former rugby player, a former police officer, a financial adviser and a City trader over a Formula 1 film tax scam

The tax scheme was created by Terence Potter, a former EY partner and former chairman of the South Wales branch of the Chartered Institute of Taxation. He was convicted in December 2015 and jailed and suspended from being a company director for eight years.

On Monday, HMRC found that ex-police officer Roderick Bond and financial market trader Lee Palmer invested in the Formula 1 Projects tax scheme, which enabled them to claim false tax rebated for a film about F1 racing stars. The film was never made.

The Revenue found that Potter had also conspired with financial adviser Simon Osborne to steal the money. Osborne introduced Simon Hill, a former Wales rugby player who is now a dentist, to the scheme. Hill also submitted fraudulent tax repayment claims to HMRC.

The investors used the scheme to claim financial losses on the £6m they claimed to have spent between 2008 and 2009. These artificial losses allowed them to falsely claim around £40,000 in tax relief for every £20,000 they had invested.

Bond, Palmer and Osborne were sentenced to two years and eight months each after admitting tax fraud and being convicted of conspiracy to cheat the public revenue.

At the trial at Southwark Crown Court on Monday, Hill was also sentenced to 20 months in jail, suspended for two years, and was ordered to do 300 hours of unpaid work.

One year after Potter was convicted, film producers Christopher Atkins and Christina Slater were sentenced to five and four years in prison respectively after using the same scheme. The pair claimed to have spent £5.7m on two film projects called Starsuckers and Mercedes the Movie.

Following the sentencing of the four investors, Simon York, director of fraud investigation at HMRC, said they had been “thwarted by HMRC investigators who work tirelessly to stamp out fraudulent activity.

“For anyone thinking of embarking on a similar path and stealing money from honest taxpayers, this result shows that nobody is beyond our reach.”

This case involved more than 100 officers from HMRC’s fraud investigation service. The Revenue has managed to recoup a total of £500,000, and is currently trying to recover further proceeds of the crime.

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