F1 star Lewis Hamilton under fire for ‘dodging tax’ on $20mn luxury jet
According to leaked documents, Hamilton avoided paying tax on his luxury jet through a complex scheme involving the import of his £16.5 million (US$21.6 million) red Bombardier jet into England via the Isle of Man in 2013.
The four-time F1 world champion reportedly received a £3.3 million tax refund on the jet – the entire value of the VAT (value-added tax) due on the aircraft – after a series of apparently artificial leasing deals was set up. According to the Guardian, Hamilton’s representatives allegedly used shell companies in the British Virgin Islands (BVI), the Isle of Man and Guernsey to essentially lease the jet from himself.
Hamilton reportedly benefitted from an Isle of Man loophole that means jets used for leasing businesses are entitled to full tax refunds, as opposed to those used for personal use. However, documents seen by the BBC’s Panorama program apparently indicate that the F1 star uses the aircraft for personal use around a third of the time.
The driver’s representatives say the scheme was inspected and deemed lawful by a tax barrister review, and that it is not correct to suggest that no VAT was paid on the jet. There is no suggestion that Hamilton himself was behind the scheme, and the driver said he does not handle the day-to-day running of his business.
However, the scheme is to be investigated by HM Revenue and Customs, according to the Guardian, and the paper reports that leaked files suggest that as much as £1.1 million of the VAT Hamilton appears to have reclaimed should have been paid, along with hundreds of thousands of pounds due on the costs of flying the jet.
Despite his huge success, 32-year-old Hamilton is something of a divisive figure among the UK public. He has lived as a tax exile since he moved to Switzerland in 2007, and now lives in Monaco. He is estimated to have a £130 million fortune, making him the richest UK sportsman and one of the wealthiest in the world. He frequently posts pictures of his lavish lifestyle, including his use of the luxury jet in the middle of the current scandal.
He recently claimed his fourth world title, although his undoubted brilliance as one of the greatest drivers of all time has not endeared him to the public as much as his success would otherwise warrant.
Hamilton is not the only high-profile figure to be implicated in the Paradise Papers scandal, in which leaked documents, many of which came from law firm Appleby, laid out the tax affairs of some of the wealthiest people in the world. The private estate of Queen Elizabeth reportedly made use of offshore schemes, and firms such as Apple and Nike have been accused of using secret havens to avoid tax.