U.K. cracks down on film tax fraud

LONDON -- The U.K. tax authorities have arrested several British bankers on suspicion of using investments in film production to illegally evade tax. According to a report in the Financial Times, investigators for H.M. Revenue and Customs arrested four current and one former employee of the Royal Bank of Scotland at their homes last week, along with several employees from two other unnamed banks. The arrests relate to the private financial affairs of the bankers, rather than to any film investment schemes run by the banks themselves. It is not known which film investment schemes are implicated in the investigation. The U.K. government has progressively tightened the rules governing tax relief for film investment over a period of several years, to make it harder for wealthy individuals to use film production vehicles as a mechanism for avoiding tax. Under current rules, anyone investing more than 25,000 ($39,500) into film must prove that they are actively involved in the production, in order to write off the investment against tax. They must show that they spend more than 10 hours a week working on the production. Contact the Variety newsroom at news@variety.com