Brothers jailed for £1m HMRC tax fraud where they pretended to make three films in the UK

Two brothers have been jailed for a total of 14 years after a 'staggering' attempt to defraud the British taxpayer out of £1m by pretending to have made a series of films. Now, one of the brothers is missing, with the other saying he has fled to Ukraine.

Carl Rees and Craig Rees, aged 52 and 50 respectively, were found guilty of submitting fraudulent claims for Film Tax Relief and VAT to HMRC, totalling more than £1m for films that were never made in the UK, or at all. Film Tax Relief was created to encourage directors and studios to make at least of part of their films in the UK, with a tax break for those that make a quarter of their film here.

HMRC proved in court that the pair had claimed their first film Whispers was made in the UK, when it was an American-made film, while their second film, The Eight, was entirely made up. Their third film, Violence, was found to have been produced simply so that the pair could submit a fraudulent tax claim for it.

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During their prosecution, younger brother Craig Rees was said to have fled to Ukraine. He was sentenced in his absence at Birmingham Crown Court today (April 8), after fleeing in January.

In passing sentence Her Honour Judge Heidi Kubik KC, said they were convicted with overwhelming evidence which had revealed “staggering and audacious dishonesty.”

To present a façade of legitimacy, the duo, from Warwickshire, set up film production companies which provided forged documents to HMRC for both the FTR and VAT repayment claims. In total, they attempted to defraud the taxpayer for £542,840 in Film Tax Relief and £484,933 in VAT repayments.

All of these claims were made between 2011 and 2015,