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Tribunal dismisses ex-BBC star’s tax scheme

25th Feb 2014
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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 “engaged in self-employment as a used car trader” during the year to April 2008. HMRC rejected the loss claim, leading the former BBC star to launch an appeal along with Eoghan Flanagan and Allan Stennett who had also used the scheme.

Moyles did not give evidence to the tribunal but submitted a “very brief and rather uninformative” witness statement that made it clear he had entered the scheme “for no purpose other than to achieve a tax saving”, according to Judge Colin Bishopp.

The star’s accountant agreed that the scale of his borrowing was driven by the amount of the tax loss he wanted to achieve, in Moyles’ case £1m, and that the trading was not carried on for its own sake but was more a means to an end.

After the judge said that it was impossible to reach a conclusion this was a trade seriously pursued with a view to profit, Moyles issued a statement taking full responsibility for his actions and said he had learnt “a valuable lesson”.

The judgement in Flanagan & Ors v HMRC [TC03314] revealed that the purpose of the scheme was to manufacture a tax loss greater than any true economic loss at little or no financial risk to the user, whose exposure was limited to the cost of the promoters’ fees and some other minor expenses.

The tribunal found the appellants’ aim was to make it appear, “as though by  magic”, that they had incurred vast fees in order to borrow modest amounts of money they did not need in order to invest it in a trade they had no desire to pursue.

The appellants loss claims were disallowed.

AccountingWEB members were quick to discuss the outcome of the case over the weekend, leading to one member saying he could now see why people cannot understand the difference between tax avoidance and evasion.

“As long as I write and appropriately inform HMRC of this legal avoidance scheme it is not tax evasion.

“But the moment a small business fails to register for VAT in time and refuse to pay the necessary output VAT that they never received from their customer to HMRC this is considered a reportable event for money laundering purposes,” said member Jekyll and Hyde.

ShirleyM added that it's was now time these scheme promoters were made to pay the cost.

“It bugs me to death that not only does the country not get the tax when it is due, but we must pay high costs to prove the scheme defective before we get any tax at all!” she said.

Treasury secretary David Gauke said: “This case is another example of why taxpayers should not fall for the promises of promoters selling schemes that are all too often too good to be true. Not only will the taxpayer waste money on the fees for these failed schemes, they will still have to pay all the tax, interest and penalties that are due.”

This is the fourth consecutive win by HMRC against schemes promoted by NT Advisors.

Replies (24)

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Glenn Martin
By Glenn Martin
25th Feb 2014 17:24

When is someone going to Jail for this.

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.

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By Justin Bryant
25th Feb 2014 17:39

Prayer condition clause

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

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Time for change
By Time for change
25th Feb 2014 18:03

In my opinion

he also used to masquerade as a broadcaster.

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Replying to Matrix:
By mikeruston
28th Feb 2014 14:46

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

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By ShirleyM
25th Feb 2014 18:11

It is fraud

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

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By carnmores
26th Feb 2014 10:52

its sheer stupidity

and a complete lack of common sense


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By mikefleming3028
26th Feb 2014 14:27

Denis Healey

"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.

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By Ted Numbers
27th Feb 2014 09:09


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. 


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By justsotax
27th Feb 2014 09:43

'used car salesman'...

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....

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By GuestXXX
17th Mar 2015 16:13


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By andy.partridge
28th Feb 2014 12:45

Chris Moyles

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? 

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By johnjenkins
28th Feb 2014 13:31

Aren't these

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

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By Paul Stark
28th Feb 2014 13:36

GAAR guidance notes

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.

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By Michael C Feltham
28th Feb 2014 13:36

Artifical Mechanism:

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.

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.



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By billgilcom
28th Feb 2014 15:24

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.....  

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By Simontax
28th Feb 2014 16:13

Moyles should be jailed

....for crimes against broadcasting!

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By Vaughan Blake1
28th Feb 2014 16:42

You say avoidance I say evasion......

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!

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By the_Poacher
01st Mar 2014 11:30

Penalty level
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

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By johnjenkins
03rd Mar 2014 10:10

Would it be that

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

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Replying to lyndonbrown:
By Michael C Feltham
03rd Mar 2014 18:28

In theory no: in practise, yes!

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.


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?




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By johnjenkins
03rd Mar 2014 21:04

Ok let's

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.

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By spurs1952
05th Mar 2014 08:27


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

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By Vaughan Blake1
05th Mar 2014 13:57

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

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!

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By justsotax
06th Mar 2014 12:10

Presumably CM's

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.

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