Tribunal dismisses ex-BBC star’s tax scheme

The first tier tribunal (FTT) has dismissed another tax avoidance scheme sold by NT Advisors involving participants, including former BBC star Chris Moyles, masquerading as second-hand car dealers.

The “highly artificial” scheme involved its users claiming to be self-employed used car traders making large tax deductions on finance fees incurred to borrow money to invest in “their trade”.

The ex-Radio 1 DJ participated in the complicated ‘Working Wheels’ tax avoidance scheme, promoted by NT Advisors, along with 450 others between 2006 and 2008 who are now being contacted and asked to pay the tax they owe.

Moyles had filed a self assessment return that claimed he had...

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Comments
Glennzy's picture

When is someone going to Jail for this.    9 thanks

Glennzy | | Permalink

These cases emerge almost weekly now. When is either an advisor or high profile client going to get some porridge for these practices. Does the guy actually expect us to believe that he thought pretending to be a car dealer when he clearly was not was a genuine an approved scheme. Does he think the man in the street does this. What I am also amazed at is how he actually earns enough money to avoid £1million tax as at best he is an average radio presenter. My mate actually bought a car from him described as a Sally Gunnell (not much to look at, but a decent runner).

The bizarre thing about these cases is that with Twitter and other social media it actually raises their profile and probably boosts their earnings further. Jimmy Carr has even include it in his act.

They bang stars up in the USA for tax evasion ask Wesly Snipes. Get some assets off these guys.

Prayer condition clause

Justin Bryant | | Permalink

At least you couldn't say this scheme didn't have a prayer.

Time for change's picture

In my opinion    2 thanks

Time for change | | Permalink

he also used to masquerade as a broadcaster.

ShirleyM's picture

It is fraud    3 thanks

ShirleyM | | Permalink

Obtaining taxpayers money by deception, dressed up as 'legal' tax avoidance. I agree with Glennzy ... this is fraud, and a prosecution should follow.

carnmores's picture

its sheer stupidity

carnmores | | Permalink

and a complete lack of common sense

 

Denis Healey    2 thanks

mikefleming3028 | | Permalink

"The difference between tax avoidance and tax evasion is the thickness of  a prison wall" and its time a few of these scheme providers saw the inside of one of these walls.

Outrage    2 thanks

Ted Numbers | | Permalink

There is a lot of outrage going on here. I do not think that HMRC suggested it was illegal. Had they thought so I am pretty sure they would have at least raided and arrested someone as they have done in other cases. Of course the mere fact that someone has been raided and/or arrested does not make them guilty of an offence. Tax fraud cannot be committed accidentally.

It is unhelpful to blur the very clear distinction between fraud and avoidance. As Denis says, the difference is one of the clearest boundaries imaginable. If you are ever locked up in prison you will see the force of that metaphor.

I am deeply uncomfortable with a clamour for the jailing of people who have, in someone else's judgment, acted immorally but legally. The scheme users' penalty is summarised accurately by Mr. Gaulke. 

 

'used car salesman'...    3 thanks

justsotax | | Permalink

can we at least agree that this was at best a figment of the imagination of the scheme provider....because this certainly didn't accurately represent what CM was....seems like an attempt to defraud to me....

Fitting punishment    6 thanks

secondhand_22 | | Permalink

As a pennace, he should be made to actually work as a used car salesman for, let's say, 10 years.

If nothing else it would keep him off the radio.

andy.partridge's picture

Chris Moyles    3 thanks

andy.partridge | | Permalink

I accept that he took advice that what he was doing was legal, but come on . . . he knew very well how many cars he had sold!

I suppose we can look forward to him smirking or feigning embarrassment about it on chat shows and edgy game shows for which he will, no doubt, be handsomely paid. Isn't that what happened with Jimmy Carr? 

johnjenkins's picture

Aren't these

johnjenkins | | Permalink

schemes supposed to be vetted by HMRC before they are marketed?

GAAR guidance notes    1 thanks

Paul Stark | | Permalink

HMRC actually include this scheme in their GAAR guidance notes as a shining example of what constitutes abusive avoidance. The steps involved to create the supposed loss makes the plot of Skyfall look sensible.

Artifical Mechanism:

Michael C Feltham | | Permalink

Any artificial mechanism is already pretty clearly defined as unacceptable for tax planning.

Many extant cases on the book.

Perhaps the Ramsey Principle and the doctrine flowing therefrom is the very best exemplar.

http://en.wikipedia.org/wiki/Ramsay_principle

The supposed "Tax Advisers" should be sued for masquerading as professionals if they failed to comprehend the Ramsey Principle!

And the cases which flowed from the doctrine.

http://www.bailii.org/uk/cases/UKHL/1981/1.html

 

 

if you are half as successful

mikeruston | | Permalink

if you are half as successful as an accountant you will do really well.

billgilcom's picture

The trouble is    2 thanks

billgilcom | | Permalink

The trouble is that as long as these "professionals" are allowed to fantasise as to what is reality and encourage their clients to put words of fiction on their tax returns or to conceal the true and full facts this country will be plagued by the greedy ones who will be left to walk the streets and repeat it again and again.     How many "failed avoidance schemes" does it take to get HMRC off its chair and do the proper investigation to prove the frauds that were clearly taking place in relation to these schemes. Maybe they should think about applying the Fraud Act 2006 --- .........   Fraud by failing to disclose information

 

A person is in breach of this section if he—

(a)dishonestly fails to disclose to another person information which he is under a legal duty to disclose, and - "Note - Tax returns are supposed to be COMPLETE and CORRECT"

(b)intends, by failing to disclose the information—

(i)to make a gain for himself or another, or - "Note - Attempts to steal the Public's purse"

(ii)to cause loss to another or to expose another to a risk of loss. "Note - Stealing public monies that could be better used for hospitals and UK  people's benefits rather than enriching the greedy and dishonest........ OK my moan for a Friday afternoon taken care of. It is ironic when you see the effect on some of the population who find themselves on the wrong side of HMRC for a few hundred or thousand pounds and then you have these perpetrators of "avoidance" scheme flaunting their successes.....  

Moyles should be jailed    2 thanks

Simontax | | Permalink

....for crimes against broadcasting!

You say avoidance I say evasion......    1 thanks

Vaughan Blake1 | | Permalink

Sounds like an old song!

I agree that the lines blurring here.  Creating basically "fictitious" losses to set against income is not far removed from creating fictitious expenses.  The latter would be viewed rather differently methinks!

Penalty level    2 thanks

the_Poacher | | Permalink

The penalty level here on all users of the scheme needs to be high enough to ensure they realise that these artifical schemes are not with the risk. Too often HMRC seem to settle for tax and interest only in avoidance cases

johnjenkins's picture

Would it be that    2 thanks

johnjenkins | | Permalink

difficult for the law to changed so that anything artificial (however legal the processes) is classed as evasion not abusive avoidance?

In theory no: in practise, yes!

Michael C Feltham | | Permalink

johnjenkins wrote:

difficult for the law to changed so that anything artificial (however legal the processes) is classed as evasion not abusive avoidance?

Firstly, John, the law per se, needs no change since as I pointed up earlier in this thread, using artificial mechanism to avoid tax (be it CT, IT, CT) is already prohibited.

What needs changing, is government, the treasury and the upper tier management of HMRC's spavined attitude!

Since Gordon "One Eye" Brown started on his process of slimming down what was HMIR, by clever tactics such as sale and leaseback of all HMIR's real estate (so the long suffering taxpayer must pay rapidly increasing rents!!) and then went on, as part of the BLiar shambling masquerade of a government to roll out increasing reliance on magic black box ICT systems (remembering the charming paedophile supporter, Patricia Hewitt was minister without portfolio for "E-Government" et al; and that's a great big fat larf for starters!), what became HMRC in 1996, has tried to replace skilled and knowledgeable revenue staff and senior inspectors with ex Tesco check out operators plus a two week course.

ROTFL!!

Tax avoidance has expanded exponentially, as HMRC's skill sets have drooped.

Accordingly, supposed "professional" tax consultants are taking the P, big time.

This nation state is now what might be best described as a "Nation of Amateurs". Be it in business or government.

HMRC's senior people, Treasury etc seem to believe the simplistic ploy of demanding a taxpayer informs them they are employing a registered "Scheme", is wholly risible. Mainly since the process of development of all UK statutes follows a set course of trial; superior court trial (e.g. Court of Appeal; then finally Supreme Court. Precedent (case) law is how UK statutes develop. New statutes are purposefully framed very loosely, to await case law development and definition.

Thus demanding registered "Schemes". simply tries (and fails; dismally, IMHO!) to follow jurisprudence experience and practice.

Ergo: why register a "Scheme"; and then wait with bated breath for HMRC to say "NO!"?

Simply forge ahead.

And await an investigation: for which there are far too few qualified staff to pursue!

Plus our dear myopic chums the idiot politicians, churn out new "Cunning Plans" by the shed load each week. With consequential demands for even more "inspectors" when there aren't enough already!

Take Auto-Enrollment as one example: simply put, there aren't sufficient extant staff to cope with the rapidly building demands of a raft of compliance issues.

It is therefore no wonder that more and more slippery geezers are doing an Arfur Daley, is it?

 

 

 

johnjenkins's picture

Ok let's    2 thanks

johnjenkins | | Permalink

say Fiddling Accountants put forward a scheme that requires a hint of artificialdom to be of benefit to the recipient. HMRC say "on yer bike". It would then be up to the scheme idealogical principals to show why it's not artificial instead of waiting umpteen years (whilst penalising a few small error related issues) and then doing a deal, which will undoubtedly be the outcome.

And

spurs1952 | | Permalink

Just out of interest what exactly did CM's accountant who actually prepared his Tax Return play in all this??  

Just out of interest what exactly did CM's accountant.......?

Vaughan Blake1 | | Permalink

Maybe he just went along with it thinking that the scheme may just about work and he didn't want to be sued under Mehjoo v Harben Barker!

Presumably CM's

justsotax | | Permalink

adviser just transferred relevant info/disclosure/figures onto CM's return.  If he wasn't asked for an opinion then he presumably just followed CM's wishes and the scheme's advice.  Hardly a locking up offence.