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HMRC internal manual

VAT Fraud

What to consider prior to determining whether to use an intervention: matters to consider when looking at particular types of taxable person or activity: creative industries tax reliefs: VAT risks / fraud: understanding the business

It is essential that you fully understand and document the way the taxable person’s business operates. You should do this at the very beginning of a compliance visit or civil investigation, with periodic updates to ensure that if the business model changes those changes are properly documented.

In many cases the production will be undertaken by a special purpose vehicle (SPV), which will register for VAT separately from the main production company. It is therefore essential that the links to the main company are fully documented, as well as what responsibilities fall within and without each company.

It is also essential that the ‘shelf life’ of the SPV is noted, i.e. when it is expected to be wound up, which will most probably be after the film etc has been completed. You should try to establish at what point this will happen and, when it does, what functions, rights etc will be disposed of and where they will go (e.g. do they return to the parent company or into another SPV?).

Further guidance can be found at: