On the RBS tax evasion stuff

I am absolutely certain that this distinction will get lost:

Last night, HMRC confirmed the arrests: “As a result of an on going HMRC investigation into tax-related criminal offences, HMRC has arrested a number of people, some of whom work for UK banks. This investigation relates to the actions of the people arrested in relation to their own financial affairs and is not connected to the business activities of the banks.”

The suspicion is that people who work for RBS have been, with their own money not the bank\’s, playing silly buggers with the tax breaks available for investment in films.

I\’m also going to be fascinated with the outcome of this case. The rules on what you may legally write off against tax in terms of film investment are so lax that it\’s difficult to conceive of it ever moving from tax compliance (which as we know, is using the tax code in exactly the manner which Parliament intends, ie, investing in films) to tax evasion. Given what you can do legally where is the room for there to be anything illegal?

One comment on “On the RBS tax evasion stuff

  1. The problem with the film tax relief was always having to invest in films to get it. Risky investments, movies.

    There were two structuring issues. One was protection for the investor so that they couldn’t lose too much money. The other was gearing up, so that the investor only had to put in a percentage of the money, the rest coming from a loan arranged by the production company.

    None of that is evasion though.

    I’m wondering where a serious allegation of evasion could come from. Possibly concealing what the true arrangements were, so that (in HMRC’s view) the person claiming the tax relief hadn’t really made the investment?

    I would be surprised if this actually makes it to court.

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