Revealed: How Tory’s off-shore film company indirectly benefited by PS121k tax credits


Ben Elliot was the Conservative party’s embattled Co-chair. He and his co-owner owned an offshore film financing company which indirectly benefited more than PS120,000 in UK tax credits.

Elliot’s ownership of a British Virgin Islands-based business – which he co-owns with Ben Goldsmith (brother of Tory peer and minister Zac) – will bring new questions to the attention of the businessman whose pursuit of controversial but ultra-wealthy political donors has been widely criticized.

The Pandora papers, the largest leakage of offshore data ever recorded, were shared with Guardian and other media by International Consortium of Investigative Journalists on Monday. They helped to expose the fact that a number of significant Conservative party funders are being accused of links to offshore finance.

The same leak today shines light on the BVI company Elliot and Goldsmith founded to finance Fire in Babylon, their 2010 documentary film about West Indies cricket.

Analysing financial disclosures shows that the BVI parent company of the duo owned a controlling interest in the British subsidiary that produced the film. In 2008, the UK company was granted a PS600,000.00 loan from its BVI parent, and PS121,000 from a government scheme to encourage film production in the UK.

The film suffered a modest loss. Without the tax credits, the subsidiary would have not been able fully repay its offshore creditors. Elliot’s BVI company and Goldsmith’s BVI firm were the largest, having loaned most of the funds to the UK business.

Although the agreement does not appear violate any tax laws or regulations, it raises questions about whether government film programs should be funding projects controlled in tax havens. The structure could have also provided tax benefits if Fire in Babylon was profitable.

Elliot is an Old Etonian with a strong network and nephew to the Duchess. He co-owns Quintessentially luxury concierge group, earning him a reputation for being a fixer for super-rich. He was credited with raising PS37m for Tories’ general election campaign.

Goldsmith, who attended Eton, is a financial analyst and a nonexecutive director at Department for Environment, Food and Rural Affairs, where his brother is a minister.

Boris and Carrie Johnson are both close to Elliot as well as the Goldsmiths. Elliot screened Fire in Babylon in July 2020 for the prime minister, his wife, and their family at their Downing Street flat. Rishi Sunak and Ben Goldsmith were also there.

“I received a call from the PM stating that he was going to be watching Fire in Babylon. I would like to go along. Ben [Elliot] also attended. It was a great experience,” Goldsmith stated.

The film, which featured cricketing legends like Sir Vivian Richards or Michael Holding, did not achieve commercial success.

Analysing company filings shows that the documentary suffered a loss of PS70,000. It appears that the UK company would have struggled to repay its offshore investors without the HMRC cash rebates. The largest of these was Elliot and Goldsmiths BVI company, E&G Productions which had provided the PS600,000.

Goldsmith stated that the film was funded by a group consisting of cricket fans who contributed between PS5,000 and PS100,000. It is unclear if these contributions, mostly from UK residents, were converted into the PS600,000.00 offshore loan from a BVI firm, or how much came from Goldsmith and Elliot.

A former HMRC tax inspector who examined the structure for Guardian said that “In practice, it is difficult to see that the use by two UK residents of the BVI company could be any other than tax motivated.”

Prem Sikka is an emeritus professor from Essex Business School and a Labour peer. He said: “With tax havens there are two benefits: opacity, and tax avoidance. There is nothing else.

Elliot Goldsmith and Goldsmith were prominently credited with being “executive producers” of the film. They said that the project was not expected to make any profit, so the BVI choice was not meant to avoid taxes.

The Guardian was informed by Goldsmith that he was a “non-dom” at the time of the film’s financing and production. This meant that he didn’t have to pay UK tax on any overseas earnings or assets, even though he was a UK resident.

Non-doms are exempted from tax on income, capital gains and funds returned to the UK.

Goldsmith seems to have made sure that his investment in Fire in Babylon was exempt from tax by taking out a loan from BVI and not sending money directly to the UK company.

Experts also suggested that if the film was a commercial success, the structure could have allowed for profits to flow offshore. For example, money from TV screening deals with countries such as Australia and India could have evaded UK tax for Goldsmith.

Elliot and Goldsmith said: “A Caribbean Company was used at the beginning because we anticipated securing investments to make Fire in Babylon, primarily from investors outside of the UK and in that particular part of the globe.” It turned out that more UK-based investors supported the film than we anticipated, though some of the investors were in the Caribbean, as you’ve seen.

Fire in Babylon seems to have attracted only two Caribbean-based investors. An offshore finance expert also questioned the notion that a BVI company would encourage others.

He stated that it is not more appealing for Caribbean investors to invest into a BVI-based company than in a Netherlands or Luxembourg company. “Perhaps it’s the opposite, since there is very little to litigate. BVI is actually less appealing to Caribbean investors.

Although Elliot & Goldsmith claim that the film was unlikely to be profitable, the filmmakers seem to have been more optimistic.

The Guardian has seen the contract used to convince the cricketing stars to appear in the film. Without them, there would not have been a documentary. The contract states that players were given a small fee and promised a portion of the film’s earnings in return.

Elliot & Goldsmith spokesperson said that the film was produced by a UK-based company and is subject to UK taxation. All taxes were correctly and transparently reported to the appropriate authorities.

The Guardian asked Elliot and Goldsmith if there was any interest in the UK production company through their offshore company. They also wanted to know why their names were not made public in Companies House filings. This would have revealed how they controlled the UK production firm via their BVI company.

The connection was only formalized in 2016, when Elliot, Goldsmith, and WIB Productions Ltd Ltd of the UK, made the film.