Five people are to face charges in connection with a film industry tax relief fraud which cost the public purse around £125m, the Crown Prosecution (CPS) has announced.

The move follows an HMRC investigation into alleged abuses of a tax relief that allows investors in the British film industry to offset losses against other tax liabilities. In a statement, the CPS claimed that between 1 January 2002 and 11 July 2011, the five reportedly 'abused and dishonestly marketed' a scheme designed to cheat the public revenue.

Andrew Penhale, CPS deputy head of fraud, said: 'The evidence suggests that the value of allowable losses was falsified, that there was a conspiracy to defraud investors and that documents were falsified for accounting purposes.'

As a result, Keith Hayley, Robert Bevan, Charles Savill, Cyril Megret and Norman Leighton will each face three charges: conspiracy to cheat the public revenue, conspiracy to defraud and conspiracy to falsify documents, the CPS said. All five defendants are due to appear before Birmingham Magistrates' Court on 18 June 2013.

News of the CPS decision comes a month after jail terms were handed to a UK-based gang who pretended to be making a £19.6m Hollywood blockbuster called Landscape Of Lives as part of a complex scam aimed at falsely claiming VAT repayments and film tax credits.

The fraudsters created a chain of companies to make false applications for some £3m in VAT repayments and film tax credits used to encourage the British film industry, and succeeded in cheating taxpayers out of nearly £1m.