Lewis Hamilton under investigation for tax invasion on private jet

first_imgRecently crowned Formula One champion Lewis Hamilton and one the richest sports-person on the planet is under investigation by British tax authorities for avoiding to pay taxes on his private jet.The Brit, who races for Mercedes, used an elaborate scheme to move his private jet to the Isle of Man, a tax-haven in the Irish Sea,  for which he received VAT return upwards of 3 million back in the year 2013, according to the BBC and the Guardian.The International Consortium of Investigative Journalists (ICIJ) have alleged that  Hamilton was helped in the tax fraud by EY and Appleby, a Bermuda-based law firm at the centre of the ‘Paradise Papers’ leaks.They helped the four-time Formula One champion to set up ‘artificial leasing businesses’ and facilitate the multi-million-pound VAT rebates.The Jet in question is a Bombardier Challenger 605 and worth around 16.5 million pounds and Hamilton has is the past posted pictures on social media of it on holidays and personal trips.He has frequently posted photographs of its use for holidays and personal trips on social media.Landed in Abu Dhabi . Looking forward to the race weekend ahead. #AbuDhabiGP @bombardierjets #redjet #ambassador pic.twitter.com/uNFI9tYoLi- Lewis Hamilton (@LewisHamilton) November 23, 2016What Hamilton did was make complex arrangements such that he would buy the plane using a company in the British Virgin Islands and then the company would lease out the jet to another company in the Isle of Man which would also be owned by Hamilton himself.  Then the jet would be leased further out to a management firm which charters the jet exclusively to the Formula One champion and another of Hamilton’s companies in Guernsey.advertisementHamilton has been found to have used the jet for personal leisure more than almost one-third of the times. He used this method to get VAT refunds on his personal use of the jet, which is strictly against  the EU rules.  The Guardian reported that there has been no evidence that Hamilton himself directly involved in formulating the scheme, but was simply following professional advice of EY and Appleby.BBC was informed by Hamilton’s lawyers that the practice was found to not to be against the law by a review by a tax barrister, and that some VAT had been paid through the arrangements.”All our advice, whether in planning or compliance, is based on our knowledge of tax law and providing transparency to tax authorities,” EY said in a statement.The European tax rules states that 20 percent of the purchase price should be paid in VAT, which can only be reclaimed for business use.last_img

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