The investigation by HM Revenue and Customs, identified accountant Terrance Potter, 55, as the “architect of the fraud”.

HMRC released a statement this morning, which read: “Potter, a promoter of tax avoidance schemes, devised and sold a number of fraudulent schemes to wealthy professionals, which were portrayed to HMRC as being tax avoidance schemes exploiting legal loopholes. However, the bogus schemes were fraudulently underpinned by false documents, making them tax evasion.

“Potter set up two partnerships that were sold to the wealthy investors. One produced a film called 'Starsuckers', the other was a project to develop a package to be made into a film by others called 'Mercedes the Movie'.

“Together both partnerships claimed to have spent £5.7 million on the projects. This created artificial losses that allowed the investors to claim back PAYE tax they had paid.

“The partnership declared the losses in its tax return and so did the investors, which would have allowed them to recoup up to £40,000 in tax relief from HMRC, for every £20,000 they had invested. However, as the scheme was illegal their claim for tax relief was false. The claims were supported by false documents produced by Potter.”

Jennie Granger, director general of enforcement and compliance, HMRC, said: “This was pure greed by a dishonest tax agent, a financial adviser, and people who were already wealthy individuals.

“Those found guilty had no interest in the film industry, or regard for the impact on honest taxpayers. While it started with a tax adviser pushing a deeply fraudulent tax scheme, wealthy professionals investing in such schemes should be aware of the pitfalls. Those found guilty believed they were above the law, cheating the system by masking tax fraud as investment in films.

“Groundbreaking work from our expert investigators uncovered the full extent of the fraud, and this verdict shows that those who engage in this sort of activity are not beyond our reach. The message for anyone thinking of joining such a scheme is think again."

In a previous trial, which can only now be reported as restrictions have been lifted, three investment bankers, James Hyde, Phillip Jenkins and Hamish MacLellan were sentenced for taking part in the fraud, HMRC also reported.

Their trial took place in September and all three received custodial sentences.