After a suspected case of fraud filed by UK independent producers, the UK’s Revenues and Customs (HMRC) under His tax authorities has added additional security controls to minimize fraudulent claims regarding the repayment of value-added tax (VAT).
Last month, nine UK producers moved forward anonymously through online network producers, saying they were affected by suspected cases of VAT fraud that took place in low-budget productions, primarily from October to December last year.
Unknown to the company, people got a VAT number for production, locked the producer from their accounts, and proceeded to request a VAT repayment.
Producers then returned to their VAT accounts, struggled to make legitimate claims, creating immeasurable economic pressure on production.
VAT is the tax added to most products and services, of which the standard tax is 20% in the UK. VAT registered companies may claim VAT spent on goods and services that are fully used for business purposes. For film production, this includes camera suppliers, crew members, caterers and locations.
VAT repayments form a critical part of the cash flow of smaller, independent UK productions.
HMRC will not comment on how widespread the issue is, but screen I’ve seen similar spikes in industries other than films.
A spokesman for HMRC said: “Like all large customer service organizations, our systems are constantly being attacked by fraudsters, so every VAT repayment is checked for a variety of risks, including fraud.
“We are speeding up these checks by allocating additional resources to them and introducing additional security controls to minimize fraudulent claims.”
“I cried”
British producer Olivaro Skill Record Player movie Olivaro Skill. Tuesdaywith support from PACT and BFI, is leading efforts to protect UK producers from VAT fraud cases. Roskill is also the co-founder of Hacking Games, which aims to create a generation of ethical hackers to oppose Cybercrime. Roskill himself was not a victim of VAT fraud, but he became involved in the issues that were warned it through an anonymous group of producers.
Last week he held a video call for interested UK producers, with about 40 producers taking part in accounting, financial technology and cybersecurity, along with PACT and BFI representatives.
Roskill aims to get answers from HMRC about how protection measures can prevent this from continuing. How can HMRC reform the way fraud is reported? And how can the UK government’s Ministry of Culture, Media and Sports (DCMS) support producers on this issue?
“Producers can tell you, accountants will tell you, line producers will tell you, the complexity and balance of the film, whether it’s small or big, is very finite in its cash flow.
Who is the producer? screen While anonymous, he was blocked from his £1.3 million production account after suspected attempts to access his account in October 2024.
“We were over £100,000 in our post (production) home because we couldn’t pay the bill,” the producer said. “We ran out of money and had to lend our own cash to the film production company. We just started paying the bill. We had a composer’s bill to pay, and we got a VFX fee.”
After waiting several months, I put it on hold with HMRC for hours and submitted a “pile of documents” before repayment was made.
“As victims of some sort of fraud that blocked accounts and alerted accounts, we were treated essentially like scammers,” the producer said.
“It’s great that the government has helped with the IFTC (Independent Film Tax Credit),” they continued. “On the one hand they give, but on the other hand they’re doing it (independent filmmaking) because the system isn’t working differently.”
Another producer, locked out of the account, was working on production of £1.2 million and had to win a £100,000 loan to float production due to delays in valid repayment claims.
The producer said screen Of their complaints about the lack of understanding from various HMRC officials, how the film’s funding works and while producers are now in burden, they are trying to unlock their accounts and charge for VAT.
When they were able to ultimately talk to the empathetic executive, the producer said: “I cried. “I have £34 in my bank account, I borrow people’s money, I ow the interest rates I have to borrow money in this VAT.
last year, screen Similar complaints about lack of understanding within the HMRC reported similar complaints about how the film industry works and causes delays in repayment. HMRC declined to comment at the time on whether a film industry-specific investigation was being conducted and causing delays.
HMRC declined to comment when asked screen How we are trying to address the issue of educating officials in the independent film industry has repeatedly committed to “additional resources.”
(TagStoTRASSLATE)Production (T)UK/Ireland
