Adviser attacked over £262m tax avoidance scheme as court battle begins
A financial adviser is one of the five defendants embroiled in a court battle after facing allegations of setting up a £262 million tax avoidance scheme.
In a trial at Birmingham Crown Court, financial adviser Norman Leighton, chartered accountant and film producer Keith Hayley, producer Robert Bevan, Charles Savill and media consultant Cyril Megret are said to have claimed to help finance more than 300 British films as part of the £262 million scheme that allegedly enabled investors to reduce their tax bills.
According to the Times, the scheme took advantage of government breaks for the film industry to create the appearance of big ‘paper’ losses. Investors in the scheme included pop stars, politicians and aristocrats.
Patrick Harrington, QC for the prosecution, said the potential loss to HM Revenue & Customs (HMRC) for the ‘audacious fraud’ was £100 million.
Leighton, the adviser, allegedly used his Monaco-based company to give the appearance that up to £262 million was being invested in the scheme and was allegedly paid £300,000 for his part in the scheme.
The investments were transferred from Britain to an account in Monaca, then to British Virgin Islands, onto Guernsey and then back to British Virgin Islands before returning to the UK, according to Harrington.
Harrington said the transfers were ‘a deliberate and cynical attempt to disguise what was going on.’
The group allegedly used London-based company Little Wings to operate the scheme and also secretly controlled a series of offshore companies, including Fat Cat Films.
The group allegedly created four limited liability partnerships that were used to receive investors’ money between 2002 and 2005. The partnerships agreed to invest £40,000 in pre-production funding for 302 firms, 35 of which were made.
All five men deny conspiring to cheat the taxman and conspiring to commit false accountancy for the purpose of a tax avoidance scheme between 2002 and 2009.
The trial continues.
