The latest compliance issues in wealth management across the UK, Europe, Middle East and Africa.

HMRC
A former police officer, financial advisor and a City trader have been jailed for a total of eight years for a £2.4 million ($3.2 million) tax scam after an investigation by HM Revenue and Customs (HMRC).

Roderick Bond, a former police officer, and Lee Palmer, a financial market trader, invested in the Formula 1 Projects scheme that involved claiming false tax rebates for a film featuring F1 racing stars which was never made. 

Simon Osborne, an Independent Financial Advisor was jailed for his part in introducing Simon Hill, a former Wales international rugby union player, to the scheme.

Terence Potter, a former accountant, created the scheme for wealthy investors with the defendants.

The scheme saw investors claim significant financial losses on the £6 million they claimed to have spent between March 2008 and May 2009. These artificial losses enabled the investors to falsely claim around £40,000 in tax relief for every £20,000 they had invested.

HMRC investigators identified a series of suspicious tax repayment claims, which had originated from partnerships set up and managed by Monaco-based accountant Potter. 

The majority of the tax refunds claimed by investors were withheld and £210,000 that had been paid out has since been recouped by HMRC.

“These men tried to cheat the system by claiming tax relief on a non-existent film and were thwarted by HMRC investigators who work tirelessly to stamp out fraudulent activity,” Simon York, director of fraud investigation at HMRC said. “For anyone thinking of embarking on a similar path and stealing money from honest taxpayers, this result shows that nobody is beyond our reach.”