Eight year jail sentence for ‘deeply fraudulent’ tax specialist

Film schemes

A former EY partner has been jailed for eight years for his part in devising a ‘deeply fraudulent’ £2.2m film industry investment scheme, while a financial adviser who jointly promoted the scheme with him has received a six-year sentence

An HMRC investigation found that accountant Terence Potter was the ‘main architect’ of the tax avoidance schemes, which it said were fraudulently underpinned by false documents, making them tax evasion.

Potter set up two partnerships, one of which produced a film called 'Starsuckers', while the other was a project to develop a package to be made into a film by others called 'Mercedes the Movie'. Together with Neil Williams –Denton, these schemes were sold to wealthy professionals. The 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.

Jennie Granger, director general of enforcement and compliance, 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.’

Potter, formerly of Singapore and before that of Monaco, was an accountant and tax specialist and a former partner in EY. HMRC said that although involved in film productions, Potter was principally a promoter of tax avoidance and evasion schemes. He has been sentenced to eight years on all four counts concurrent.

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.

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Pat Sweet |Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

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