Film producer jailed for £1.6m VAT fraud

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A film fraudster has been jailed for three years and eight months after cheating the public revenue of £1.6m in VAT. 

Sri Lanka-born Damita Nikapota made a number of fraudulent VAT repayment claims from 2006, via his LA-based film company AS Productions, for film production costs of over £11m.

He claimed to be involved in producing and filming a movie in Britain called The Flying Scotsman. 

The 'producer' claimed production costs including employing famous Hollywood actors and working on adaptations of books by well-known authors.

His official IMDb page cites him as being involved as producer and executive producer on a number of film productions.

In addition, he impersonated Hollywood producers, some dead, when he contacted the Revenue to validate progress claims. 

But when the Revenue investigated, they discovered Nikapota had been removed from The Flying Scotsman film production. They also found some of his companies linked to it were in administration by 2005. 

HMRC reported that the tax he cheated the Revenue out of was spent by him on a 'luxury' lifestyle, including travel to the Cannes Film Festival and a Malibu villa. He was arrested upon returning to the UK for a trip from Canada last April.

At Southwark Crown Court this week, Nikapota pleaded guilty to the offence of cheating the public revenue.

He received an eight-year ban on being a company director in addition to his prison sentence. 

Joe Rawbone, assistant director of criminal investigation at HMRC, said that every bit of paperwork Nikapota submitted had been "fictitious". 

“Not only will he spend significant time behind bars, but he faces full confiscation proceedings to recover the money he stole from UK taxpayers," he said.

About Rachael Power

Your friendly, neighbourhood community editor. 

Twitter: @rachpower10 


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30th Jun 2014 13:55

so many criminals taking advantage

There are so many cases like this it makes you wonder how many are not being pursued through the courts.

It really is about time some tightening of the controls took place instead of the ineffectual raising of the penalties.

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By RobertG
30th Jun 2014 15:15


It seems like this is happening all the time but in reality it is a few cases given huge publicity.

The systems are quite robust in that a film has to be certified as British with the BFI (on an interim and final basis).  They get to see the budget and final cost reports and the actual film.  The UK film tax credit claim is presented to HMRC specialist unit which scrutinise every aspect.  They will check out what has been done before and who is making the claim this will include looking at films` websites and those of the producer and IMDB profiles.

Bearing in mind the BFI and HMRC film unit are experienced in knowing `what looks right` in a movie and what to expect in a film`s production cost reports relative to its budget.

It is because HMRC are doing their job that  attempts at overinflated claims are getting flagged up.




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30th Jun 2014 19:01

working title?

So he wasn't a film producer then?

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