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Tire of a ferrari Formula 1 racing car AccountingWEB Bernie Ecclestone
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Bernie Ecclestone admits to £400m tax fraud

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Former Formula One supremo Bernie Ecclestone has pleaded guilty to fraud after failing to declare over £400m of offshore assets.

12th Oct 2023
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Bernie Ecclestone admitted the single charge of fraud at Southwark Crown Court today, following lengthy negotiations, and was sentenced to 17 months in prison, which was suspended for two years. He also paid HMRC more than £650m to cover the cost of the tax, interest and penalties. 

The verdict comes after a civil tax investigation started by HMRC in 2012 into the 92-year-old billionaire’s tax affairs.  

The investigation discovered that Ecclestone held more than £416m in overseas assets. HMRC said Ecclestone had the chance to correct his tax mistakes through a Contractual Disclosure Facility.  But the former Formula One boss rebuffed the offer, claiming in 2015 that he was not the settlor or beneficiary of any offshore trust.  

Working with Singapore authorities, HMRC’s fraud investigation service uncovered that Ecclestone was the beneficiary of trusts, including one that held £416m.  

Andrew Penhale, Chief Crown Prosecutor, said: “All members of UK society, regardless of how wealthy or famous they are, must pay their taxes and be transparent and open with HMRC about their financial affairs.

“We are pleased to bring such a complex case to a successful conclusion. We worked very closely with HMRC throughout and it is rewarding to see that they have also secured such a significant civil tax settlement, through the negotiation process.”

A longstanding tax conflict

The British business magnate was in the driver’s seat of Formula One from the 1970s until January 2017, when he was replaced as the chief executive and was appointed chairman emeritus. 

This waves the finishing flag on a longstanding brush with the tax authority for Ecclestone. Back in April 2014, it was reported that Ecclestone avoided a £1.2bn tax bill after he reached a settlement with HMRC following an investigation from BBC Panorama. The investigation found that Ecclestone had moved assets offshore in 1995 and gave the rights to his wife, who then transferred them to a family trust in Liechtenstein before selling on the assets. 

His advisers have also had run-ins with HMRC. Stephen Mullens, a solicitor, failed to convince the first tier tribunal that the payments he received from the racing impresario were gifts and had nothing to do with the business. He claimed the gifts came from a place of affection as part of his relationship with Ecclestone. 

A victory for HMRC

Ecclestone’s guilty plea shines the spotlight on HMRC investment in its offshore, corporate and wealthy unit (OCW). Andrew Sackey from Pinsent Masons said HMRC will see today’s verdict as a “significant victory” and a “major return on investment” in its OCW team.   

“This shows that HMRC is more than willing to take on the most complex cases involving high net worths. The clear message from HMRC is that if you have assets hidden offshore the sooner you approach them and agree a settlement, the better,” said Sackey.

“HMRC is likely to continue to invest in the areas where it is seeing the biggest returns. If investigations into ultra-high net worths keep delivering on this scale, then this area will get more resources and more budget. That means more and bigger investigations of wealthy individuals in the coming years.”

Set up off the back of the Panama Paper leaks, the OCW has around 500 staff and targets deliberate, high-value tax evasion, fraud and money laundering.

Commenting on today’s guilty plea, Richard Las, chief investigation officer and director fraud investigation service at HMRC, said: “Bernie Ecclestone has had ample time and numerous opportunities to take responsibility and be honest with HMRC about his tax affairs.

“Instead of taking these opportunities he lied to HMRC and as a result we opened a criminal investigation.

“This investigation has involved enquiries around the world and culminated with Ecclestone’s guilty plea to fraud. He now has a criminal record and has paid £652m relating to his wider tax affairs.

“This conviction demonstrates no one is above the law and HMRC will work tirelessly to ensure the tax system is fair to all and pays for our vital public services.”

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Replies (34)

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By Justin Bryant
12th Oct 2023 13:53

Here BE complains of expensive adviser fees. https://www.bbc.co.uk/news/uk-67088503

No sh*t if you read this: https://www.accountingweb.co.uk/any-answers/this-is-almost-unbelievable , https://www.accountingweb.co.uk/tax/personal-tax/racy-tale-of-lavish-gif...

HMRC's annual cost is c£5bn, so it just needs about 7-8 of these a year to cover that. Presumably it was settlements legislation and/or ToAA that did for him here. (I could have advised him on that for c£10k (plus VAT) and saved him all this expense and aggro.)

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By kestrepo
12th Oct 2023 13:56

Quick make the guy a Lord while no one is looking - the country could do with the cash!!

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Replying to kestrepo:
Ivor Windybottom
By Ivor Windybottom
13th Oct 2023 10:22

Great idea.
Members of the Lords are deemed UK domiciled and so that would bring him into the IHT net.

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By More unearned luck
12th Oct 2023 14:13

Why do they always pick on the little guys?

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Replying to More unearned luck:
By Husbandofstinky
13th Oct 2023 13:22

Quote of the day....

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By Tom+Cross
12th Oct 2023 15:11

And what a gent the man is.

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By JustAnotherUser
13th Oct 2023 08:33

He also paid HMRC more than £650m!!!!! Is that almost 1% of HMRC annual haul, staggering!

Guess he now needs to cut down on his $5 lattes and avocado toast to get by.

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Replying to JustAnotherUser:
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By DavidWinter
13th Oct 2023 10:05

That's not how tax works, nor should it.

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By sumo69
13th Oct 2023 09:59

Perhaps HMRC could divert a few million to staffing the Agent Dedicated Line and clearing some of the post backlog - I am still waiting for a client refund arising for higher rate pension relief that was with M HMRC in April 22!!

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Replying to sumo69:
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By WallyGandy
13th Oct 2023 11:12

I could not agree more! Are you listening, HMRC? Take that as a "no"

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By Paul Morton
13th Oct 2023 10:02

He wouldn't enter into the CDF as it would have meant disclosing all irregularities in his lifetime. Draw your own conclusions!

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Replying to Paul Morton:
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By johnjenkins
13th Oct 2023 10:06

Exactly. If this is what he had to admit to to keep him out of jail then to him it's well worth it.

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By Jakesie
13th Oct 2023 10:08

Consequence: Pay what's owed plus penalties and interest and a suspended sentence. While “HMRC is on the side of honest taxpayers and we will take tough action wherever we suspect tax fraud,”. Very tough indeed, for a well connected tax fraudster who admitted that he intentionally lied.

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By Jakesie
13th Oct 2023 10:09

Consequence: Pay what's owed plus penalties and interest and a suspended sentence. While “HMRC is on the side of honest taxpayers and we will take tough action wherever we suspect tax fraud,”. Very tough indeed, for a well connected tax fraudster who admitted that he intentionally lied.

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By mikebarlow
13th Oct 2023 10:11

How is it that Lester Piggott was sent down for similar but BE gets a suspended sentence?
Perhaps it’s who you know

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Replying to mikebarlow:
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By wilkotax
13th Oct 2023 10:27

I think he's very fortunate in the timing of this case. If the prisons are so full that rapists can't be sent to jail there was no chance he would, no matter how egregious his behaviour.

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Replying to mikebarlow:
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By wilkotax
13th Oct 2023 10:27

I think he's very fortunate in the timing of this case. If the prisons are so full that rapists can't be sent to jail there was no chance he would, no matter how egregious his behaviour.

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Replying to mikebarlow:
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By Paul Morton
13th Oct 2023 12:42

Lester Piggott was jailed for paying his tax, interest and penalties from a previously undisclosed bank account. Numpty!

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Replying to Paul Morton:
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By johnjenkins
13th Oct 2023 13:54

Lester Piggott was also jailed for putting in writing that he wanted cash so as not to pay tax.

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By towat
13th Oct 2023 10:17

I understand he's 92 and paid the tax plus penalties (eventually) but if one of us defrauded HMRC by as much as 1% of that amount they would throw away the key. Obviously this is just the tip of the iceberg from a (long) lifetime of tax evasion.

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By richards1
13th Oct 2023 10:41

What I don't understand is why Bernie hadn't moved to Monaco years ago.

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By Arcadia
13th Oct 2023 11:21

Agreed. Tip of the iceberg. If he has agreed to pay this, then the true figure is probably several times bigger. And why has he been allowed to amass billions from running formula 1? Where is the anti-trust legislation in this country that prevents such egregious (yes, that word again) gouging?

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By Springfield
13th Oct 2023 11:43

Has he actually paid the money over yet?
If so, have any of the banks involved in moving these huge sum from one or more sources from around the world complied with their ML obligations regarding the source(s) of this money?
Has HMRC itself complied with their ML obligations on the source(s) of this money?

Not a tax issue perhaps, but does anyone know how Baroness Mone is doing these days?

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By Hometing
13th Oct 2023 12:08

It's almost as though these billionaires can't be trusted

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By justsotax
13th Oct 2023 12:14

Wonder what would happen if you defrauded the benefits system out of that kind of money......hmmm

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By Michael Stannard
13th Oct 2023 12:17

Looking at past sentences for "cheating the Revenue", the idea that no-one is above the law makes a total mockery of the legal system. Apart from the sentence itself being suspended (cf 8 years immediate custody for Michael Hunt of Nissan in 1993, on an amount of tax of 55m.), it was not even the maximum capable of being suspended (2 years). It appears that, unusually in such a case, no confiscation order was made and the financial penalty appears, based on tax, interest, and penalties, appears to be considerably lower than the amount of any confiscation order would have been. Oh for the political connections.

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By moneymanager
13th Oct 2023 12:27

Millions? Chump change compared to the criminal frauds known as the covid vaccines and oh, all that money showered into the hands of the CIA puppet.

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Replying to moneymanager:
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By paulwakefield1
13th Oct 2023 17:02

moneymanager wrote:

the criminal frauds known as the covid vaccines

???

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By Mr J Andrews
13th Oct 2023 15:30

A jail term - on top of the punitive settlement - is the deterrent needed and deserved. He's still left with too much money than he knows what to do with.
As for the judge deciding his age warranted just a suspended sentence ; I trust the learned fellow applies this Formula to all fraudsters ?

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By tpcreynolds
13th Oct 2023 19:59

Who were Ecclestone's accountants at this time?

Not long until accountants get the same reputation as solicitors!!!

Is that wise?

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By tpcreynolds
13th Oct 2023 19:59

Who were Ecclestone's accountants at this time?

Not long until accountants get the same reputation as solicitors!!!

Is that wise?

Thanks (0)
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By tpcreynolds
13th Oct 2023 19:59

Who were Ecclestone's accountants at this time?

Not long until accountants get the same reputation as solicitors!!!

Is that wise?

Thanks (0)