Three Kings film producer told to pay or face jail

Three Kings film producer told to pay or face jail

Pictured: Former tax partner and self-styled film producer Terence Potter faces prison if he doesn't pay back £1.8millon 

A film producer who helped market George Clooney's Three Kings film before exploiting a loophole to fund a BAFTA-nominated movie has been told he must pay back £1.8million or face six years in jail.    

Terence Potter, 57, set up two film companies, and recruited wealthy investors by promising they could secure tax relief against any losses made by the company.

Potter, a former tax partner at Ernst & Young LLP, recruited certified financial planner Neil Williams-Denton, 44, to help him set up the swindle and recruit additional investors.

The first company produced the indie hit ‘Starsuckers’ about celebrity culture and the tabloid press, while the second company planned to create â €˜Mercedes the Movie,’ a thriller about motor racing on the French Riviera, but was never actually made.

A government scheme known as ‘sideways relief’, launched by the then Chancellor of the Exchequer Gordon Brown in his 1997 budget to promote the British film industry, allowed investors to claim back 40% of the company’s losses from their Pay as You Earn tax.

The pair used the loophole to get investors on board, letting them share in the tax relief on the fraudulent losses of £4 million losses the company presented to HMRC between 2007 and 2010.

In what had been described as ‘the most widely exploited tax credit in British history,’ the scheme offered investors the chance to recoup £40,000 in tax relief for every £20,000 paid into the scheme.

Potter, a former tax partner at Ernst & Young LLP, recruited certified financial planner Neil Williams-Denton (pictured), 44, to help him set up the swindle and recruit additional investors

Potter - who was living in Monaco at the time - admitted conspiracy to cheat the public revenue and was jailed for eight years in December 2015. Williams-Denton was convicted of the same charge and jailed for six years after a nine-week trial at Southwark Crown Court.

Potter was the brains behind Cardiff’s Aquarius Films - which holds distribution rights to George Clooney’s 1999 blockbuster ‘Three Kings’.

He was was ordered to pay back £1,816,267.53 within three months or face a default six-and-a-half-year prison term.

Judge Martin Beddoe directed that a £1.5m sum held as security be released to HMRC as part-paymen t.

Of a £123,146.13 costs order, he added: ‘The application is conceded and therefore I make the order for payment of that sum to be made in three months as well.’

Christopher Walsh Atkins (left) and Christina Slater (right) were jailed for defrauding the public purse

Williams-Denton, who was also not present, was ordered to pay £154,681.93 in costs, again within three months.

‘That order will be enforced in 14 days’ time unless, within that 14 days, a comprehensive skeleton argument in opposition to the making of that order is served on the court and the Crown,’ said the judge.

Earlier this year, film producers Christopher Walsh Atkins, 41, and Christina Slater, 38, were ordered to repay £201,764 along with prosecution costs of £108,908.50 and £46,158 respectively.

The pair had vastly inflated invoice costs to ensure they received investment for ‘Starsuckers’ - described as a ‘critique of the rise of the celebrity culture’.

Former public schoolboy Atkins, who gave evidence at the Leveson Inquiry into press standards, made the documentary in 2009.

During their trial prosecutor Shane Collery said the pair had allowed others to wrongly claim tax relief. 

He said: ‘These defendants and others essentially created a web of lies to assist others not here to obtain tax relief to which they were not entitled.

‘They did this because this was the way they obtained funding for the film ventures they engaged in.

‘That came first, that was what mattered to them and it was more important than if the tax payer in this country effectively lost money.’

Earlier this year, film producers Christopher Walsh Atkins, 41, and Christina Slater, 38, were ordered to repay £201,764 along with prosecution costs of £108,908.50 and £46,158 respectively

The pair inflated invoice costs to make it appear as though losses had been incurred by two Limited Liability Partnerships (LLPs) created by Potter.

‘Investors in those LLPs could use those losses to reduce their tax bills,’ the prosecutor continued.

‘Potter in particular was the creator of a scheme that required that the two LLPs he formed, and indeed others, made losses.

‘This itself would then mean that investors in those LLPs could use those losses to reduce their tax bills.

‘Those investors provided the money that would be used in part to pay for the film Walsh Atkins and Slater produced and another project.

‘Without the involvement of Walsh Atkins and Slater it would not have worked.’

They used Film Tax Credit (FTC) to claim back inflated cash from the Treasury.

‘The Crown say that this film cost less than half of that which they represented to HMRC,’ the prosecutor added.

Potter, formerly of Ralli Courts, West Riverside, Manchester, was ordered to repay £1,816,267.53 along with £123,146.13 costs.

Williams-Denton, of (180) Greenmount Lane, Bolton, Greater Manchester, was provisionally ordered to pay £154,681.93 costs. 

 

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