Pandora Papers Claim Tory Co-Chair's Offshore Company Indirectly Profited From £120k Tax Credits
After the International Consortium of Investigative Journalists (ICIJ) unveiled the so-called Pandora Papers on Sunday - a dossier of more than 11.9 million leaked financial documents - an investigation by the Guardian, the BBC’s Panorama and ICIJ has put a spotlight on the links between UK Tory party coffers and offshore finance.
Amidst the fallout from the Pandora Papers leak
of offshore data, Ben Elliot, the UK Conservative party’s co-chair, is revealed to have co-owned an offshore film financing company that indirectly benefited from an estimated over £120,000 of tax credits, according to The Guardian.
The arrangement does not appear to have violated any tax regulations or laws. The claims followed an analysis of financial disclosures carried out jointly by the outlet, the BB, other media and the International Consortium of Investigative Journalists (ICIJ), which published the leaked information on alleged offshore activities
of hundreds of political figures from across the globe on Sunday.
The British Virgin Islands (BVI) company E&G Productions, is said to be co-owned by Ben Elliot, nephew of the Duchess of Cornwall, and his financier friend Ben Goldsmith, a non-executive director at the Department for Environment, Food and Rural Affairs (Defra), where his brother Lord Zac Goldsmith is a minister.
The two men are said to have set up the company in the tax haven to fund the 2010 documentary, Fire in Babylon, about the record-breaking West Indies cricket team of the 1970s and 80s.
The footage included cricketing greats Sir Vivian Richards and Michael Holding. The BVI company is reported to have held a controlling stake in a UK subsidiary, WIB Productions Ltd, that made the film, nominated for a British Independent Film Award for Best Documentary.
The pair’s names were not featured in available Companies House filings until they were registered as “persons of significant control” of the UK firm, WIB Productions Ltd, which made the film, in 2016.
Elliot and Goldsmith, claims The Guardian, financed the documentary using a £600,000 loan to the British firm from E&G Productions in 2008. The documentary, which credited the men as “executive producers” was the joint-winner of the UNESCO Award at the Jamaica Reggae Film Festival 2011, yet failed to make a profit, registering a loss of £70,000. The £600,000 loan was paid back in 2011 by WIB Productions Ltd.
Experts claim this would not have been possible if WIB had not claimed £121,000 in HM Revenue and Customs (HMRC) tax rebates offered to the film industry between 2009 and 2011 in line with a government scheme to incentivise film production in the UK. It has not been clarified exactly how much cash went directly to Goldsmith and Elliot, or other investors.
According to experts, if the documentary had achieved commercial success, the arrangement involving Ben Eliot and Zac Goldsmith’s offshore firm might also have provided some tax advantages, funnelling profits offshore.
“In practice, I cannot see that the use of the BVI company by two UK residents could be anything other than tax motivated,” a former HMRC tax inspector was cited by The Guardian as saying.
Touting their documentary as “a love letter to one of the great sporting stories of all time”, the two men dismissed the notion that they “might have attempted to conceal our involvement in the making or financing of Fire in Babylon” as “patently absurd, given our names were all over it from the start, in the credits, on the invitations, in newspaper and radio interviews and so on”.
According to Eliot and Goldsmith, they chose to set up a Caribbean company exclusively in the hopes that investment to make Fire in Babylon would be secured largely from that part of the world. However, that was not the case.
"As it turned out, more UK-based investors than we expected backed the film, although as you have spotted, some of the film’s investors were indeed in the Caribbean,” the men were cited as saying.
Furthermore, Zac Goldsmith confirmed to the Guardian that, at the time the film was being financed and made, he was a so-called “non-dom”, a UK resident whose permanent home, or domicile, is outside of the country, meaning he was not required to pay tax on overseas earnings and assets.
In July 2020, Elliot screened Fire in Babylon for Prime Minister Boris Johnson and his spouse, Carrie Johnson at their Downing Street flat, in the presence of Chancellor Rishi Sunak and Ben Goldsmith.
“I got a call saying the PM was planning to watch Fire in Babylon and would I like to come along. Ben [Elliot] was there too. They loved it,” Goldsmith was cited as saying.
According to him, a group of cricket enthusiasts had contributed to the financing of the film, making £5,000 to £100,000 contributions. A spokesperson for Ben Eliot and Zac Goldsmith was cited as saying:
“The film was made by a UK company and subject to UK taxation. All taxes have been correctly and transparently declared to the relevant authorities.”
The so-called Pandora Papers, published on Sunday by the International Consortium of Investigative Journalists (ICIJ) as part of an investigation based on more than 11.9 million leaked financial documents revealed an alleged network of offshore banking
among the world's incumbent and former global leaders and over 330 officials worldwide.
Despite a number of governments responding to the bombshell leaks by launching probes into potentially illegal practices, subsequent findings failed to substantiate any wrongdoing on the part of many of those mentioned in the trove of offshore data.