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Revealed: how Tory co-chair’s offshore film company indirectly benefited from £121k tax credits

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Revealed: how Tory co-chair’s offshore film company indirectly benefited from £121k tax credits

Ben Elliot, the Conservative party’s embattled co-chair, jointly owned a secret offshore film financing company that indirectly benefited from more than £120,000 of UK tax credits.

The revelation that Elliot has a British Virgin Islands-based company – which he owns with Ben Goldsmith, the brother of the Tory peer and minister Zac – will raise fresh questions for the businessman, whose courting of ultra-wealthy but controversial political donors has already provoked widespread criticism.

On Monday, the Pandora papers – the largest leak of offshore data in history, which has been shared with the Guardian and other media by the International Consortium of Investigative Journalists – helped expose how a series of substantial Conservative party funders are facing a range of allegations about their links to offshore finance.

Today, the same leak shines a light on a BVI company Elliot and Goldsmith created to fund the making of Fire in Babylon, the pair’s 2010 documentary film about the great West Indies cricket team of the 1970s and 80s.

Analysis of financial disclosures suggests the duo’s BVI company held a controlling stake in a British subsidiary that made the film. The UK company received a £600,000 loan from its BVI parent in 2008, plus £121,000 from a government scheme designed to incentivise film production in the UK between 2009 and 2011.

The film made a small loss, and without the tax credits the subsidiary would not have been able to fully repay its offshore creditors, the largest of which was Elliot’s and Goldsmith’s BVI company, which had loaned the UK business most of its funds.

While the arrangement does not appear to have breached any tax regulations or laws, it does raise questions about whether government film schemes should be helping to fund projects that are controlled in a tax haven. If Fire in Babylon had become profitable, then the structure might also have provided some tax advantages.

Elliot, a well-connected Old Etonian and the nephew of the Duchess of Cornwall, co-owns luxury concierge group Quintessentially, which has earned him a reputation as a fixer for the super-rich. He is credited with raising a record £37m for the Tories’ general election campaign in 2019.

Goldsmith, who also attended Eton, is a financier and a non-executive director at the Department for Environment, Food and Rural Affairs (Defra), where his brother is a minister.

Both Elliot and the Goldsmiths are close to Boris and Carrie Johnson. In July 2020, Elliot screened Fire in Babylon for the prime minister and his wife at their Downing Street flat, with the chancellor, Rishi Sunak, and Ben Goldsmith also present.

“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 said.

The film, which starred cricketing greats including Sir Vivian Richards and Michael Holding, failed to achieve commercial success.

Analysis of company filings suggests the documentary made a £70,000 loss. Without the HMRC cash rebates, it appears the UK business would not have been able to fully repay its offshore investors – the largest of which was Elliot and Goldsmith’s BVI company, E&G Productions, which had provided the £600,000 loan.

Goldsmith said a group of cricket enthusiasts had financed the film, chipping in £5,000 to £100,000 each. It is not clear if these contributions – mostly made by UK residents – were then converted into the £600,000 offshore loan from a BVI company, nor how much came from Goldsmith and Elliot.

One former HMRC tax inspector, who reviewed the structure, said: “In practice, I cannot see that the use of the BVI company by two UK residents could be anything other than tax motivated.”

Prem Sikka, emeritus professor at Essex Business School and a Labour peer, added: “With tax havens, there are two advantages: opacity and tax avoidance. There’s nothing else there.”

Elliot and Goldsmith, who were both prominently credited as “executive producers” on the film, said the project was never expected to make a profit and so the choice of the BVI was not intended to avoid taxes.

Goldsmith confirmed to the Guardian that, at the time the film was being financed and made, he was a so-called “non-dom”, meaning he did not have to pay UK tax on overseas earnings and assets, despite being a UK resident.

For non-doms, only income and capital gains generated in the UK – or funds sent back to the UK – would attract tax.

So by investing in Fire in Babylon in the form of a loan from the BVI, rather than by a direct remittance to the UK company, Goldsmith appears to have ensured his investment was tax-free.

Also, had the film proved to be a commercial success, experts said the structure could have meant that profits flowed offshore. Money from TV screening deals with foreign territories such as Australia or India, for example, could have avoided UK tax for Goldsmith.

Elliot and Goldsmith added: “A Caribbean company was used at the outset because we anticipated securing investment to make Fire in Babylon largely from investors outside the UK and specifically in that part of the world. 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.”

However, Fire in Babylon appears to have only attracted two Caribbean-based investors, and an offshore finance expert challenged the idea that a BVI company would have encouraged others.

“It is no more attractive for Caribbean investors to invest in a BVI company than a Netherlands company, or a Luxembourg company,” he said. “Perhaps even the reverse, as generally there is little substance to litigate. If anything, BVI is less attractive to a Caribbean investor.”

While Elliot and Goldsmith say that the film was always unlikely to make a profit, the creators appear to have been more optimistic at the time.

The Guardian has seen the contract used by the film-makers to persuade the cricketing greats to appear in the film, without whom there would have been no documentary. It states that the players were paid a nominal fee, but also promised a share of the film’s profits in return for their participation.

A spokesperson for Elliot and Goldsmith said: “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.”

Neither Elliot nor Goldsmith answered the Guardian’s questions about whether any loan interest was paid by the UK production company to their offshore company, nor why the pair’s names were initially kept off publicly available Companies House filings, which would have shown how they had a controlling stake in the UK production company via their BVI company.

The connection only formally emerged in 2016, when Elliot and Goldsmith were registered as “persons of significant control” of the UK firm, WIB Productions Ltd, which made the film.

They said the idea that they “might have attempted to conceal our involvement in the making or financing of Fire in Babylon is 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.”

Goldsmith added: “It is a love letter to one of the great sporting stories of all time.”

Business

NCAA sanctions Kenya Airways over passenger complaints

UAE

The Nigeria Civil Aviation Authority (NCAA) has sanctioned Kenya Airways for several consumer-related violations involving three passengers, including one Gloria Omisore.

This is contained in a statement on Friday by Michael Achimugu, Director of Public Affairs and Consumer Protection.

Achimugu stated the NCAA issued a sanction letter on Wednesday to Kenya Airways regarding the passengers’ complaints

“The infractions include failure to provide care, lack of transparency in carriage terms, poor communication with the Authority, and mishandling refunds and baggage.

“In accordance with the NCAA Regulations 2023, Kenya Airways must pay fines and compensate each affected passenger with 1,000 special drawing rights.

“The airline has seven days to comply. Failure to do so will result in more severe penalties,” Achimugu said

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Nigeria repays $3.4 billion COVID-19 funding – IMF

Nigeria has repaid $3.4 billion in emergency funding it received from the International Monetary Fund (IMF) to help the country cope with the impact of the coronavirus pandemic five years ago, the International Monetary Fund (IMF) said on Thursday.

IMF resident representative to Nigeria Christian Ebeke said in a statement that, as of April 30, the country had “fully repaid the financial support” it received under the Fund’s Rapid Financing Instrument, a facility that provides urgent balance of payments funding to member nations.

“Nigeria is expected to honour some additional payments in the form of Special Drawing Rights charges of about US$30 million annually,” Ebeke added.

The most recent data from the Debt Management Office shows that Nigeria last year spent $4.66 billion to service its foreign debt, of which $1.63 billion was to the IMF. (PL/REUTERS)

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IMPI rejects IMF, World Bank’s 3% economic growth forecast for Nigeria

The Independent Media and Policy Initiative (IMPI) has questioned the rationale by the International Monetary Fund (IMF) for downgrading its economic growth projection for Nigeria in 2025 from 3.2 percent to 3.0 percent on the back of the global oil slump.

This according to the think tank is because the Nigerian economy has not, of late, been solely about oil especially with the substantial growth in the country’s non-oil export year-on-year as a result of ongoing economic diversification and the impact of government policies.

In a policy statement signed by its Chairman Dr Omoniyi Akinsiju, IMPI argued that it was more favourably disposed to the 7 percent growth forecast by Minister of Finance and Coordinating minister of the Economy Wale Edun.

It said, “In its economic outlook, the IMF downgraded Nigeria’s economic growth forecast for 2025 by 0.2 percentage points to 3.0 per cent, down from 3.2 per cent, while growth for 2026 was also revised downward by 0.3 percentage points to 2.7 per cent.

“The IMF justified this forecast by citing projected lower global oil prices as a significant risk to the country’s fiscal and external balances. We wonder how a single factor can be responsible for the projected massive decline in the size of an economy, moreso, when Nigeria is moving away from its dependency on crude oil earnings.

“However, the World Bank’s projection, on the other hand, offers a more optimistic view. In its report, the World Bank projected that Nigeria’s economy would grow by 3.6 per cent in 2025, building on an estimated 3.4 per cent expansion in 2024 and, thereafter, strengthening to 3.8 per cent by 2027.

“The bank credited the federal administration’s possible sustenance of economic reforms with the gradual stabilisation of the macroeconomic environment. Critical to the World Bank’s projection is the expected improvement in the performance of the non-oil sectors, mainly services such as financial services, telecommunications, and information technology, as well as easing inflationary pressures and improved business sentiment.”

IMPI also argued that it was not unusual for countries to pick holes in IMF’s projections while citing the examples of Mexico and Zambia where it was proved wrong.

“IMF’s GDP data discrepancies are not unique to Nigeria. At different times, its country members worldwide have had cause to dispute the body’s projections on various grounds. Mexico, for instance, has also disagreed with the IMF on its forecasts.

“In its World Economic Outlook, the IMF forecasted a 0.3 per cent contraction in Mexico’s economic growth for 2025, down from the Fund’s January forecast of a 1.4 per cent expansion, as U.S. tariffs bite into exports.

“In dismissing the IMF’s forecast, the Mexican President Claudia Sheinbaum declared, “We do not know what it is based on. We disagree. We have our economic models, which the finance ministry has, that do not coincide with this projection.”

“She added that public investments would prevent the economy from contracting. She touted her government’s “Plan Mexico,” an effort to boost domestic industry amid tariffs U.S. President Donald Trump imposed on some imports from Mexico.

“From the foregoing, it is clear why Nigerians should not take the recent IMF’s negative economic projections very seriously. Experience has shown that several IMF projections on developing economies, such as ours, often prove inaccurate.

“In 2008, the IMF predicted that Zambia would be hit by the fall in copper prices during the financial crisis. The IMF was proven wrong as the Zambian economy survived the global downturn.

“We find comfort in the submission of the US Department of State, which described Nigeria as an economic miracle while commending the federal government’s ongoing reforms,”IMPI added.

On concerns by both the World Bank and IMF on poverty in Nigeria, the think tank posited that the incumbent federal administration is better placed than its predecessors to tackle the issue.

“We acknowledge the concerns the World Bank and the IMF raised about the limited impact of the policies on reducing poverty among everyday Nigerians.

“But the truth is that before 2023, the country had been a site for endemic poverty, with the number of people living in absolute poverty defined in terms of the minimal requirements necessary to afford minimal standards of food, clothing, healthcare and shelter, reaching a high of 99,284,512 people in 2010, about 60.9 per cent of the population at that time.

“In 2004, NBS estimated the poverty rate to be 54.7 per cent in 2004 and this was despite Nigeria experiencing economic growth, with crude oil prices ranging between $100 and $120 per barrel and a daily production of 2.3 million barrels.

“When the dynamics of the years, especially the oil boom era between 2010 and 2014, are compared to the evolving characters of the present-day economy, we see sufficient indicators of the impact on the average Nigerian in the near term.

“In other words, if there is ever a possibility of reducing the number of Nigerians living below the poverty line, it is under the current federal administration.

“For instance, the recently released Central Bank of Nigeria’s (CBN) March 2025 economic report indicated continued expansion in economic activities across Nigeria. The composite Purchasing Managers’ Index (PMI), at 52.3 percentage points, indicates economic expansion for the third consecutive month in 2025,” it concluded.

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