Remember the time when Lewis moved out of the UK and to Monaco or was it Switzerland? I can’t recall now but he moved and that had server fans in the UK a little nonplussed with the 4-time champion and they called him a tax exile.
The BBC has posted a story about the new Paradise Papers and the people discovered within them avoiding taxation. The BBC said:
“Formula 1 champion Lewis Hamilton avoided tax on his £16.5m luxury jet, according to Paradise Papers documents.
They show a £3.3m VAT refund was given after the Bombardier Challenger 605 was imported into the Isle of Man in 2013.
It appears a leasing deal set up by advisers was artificial and did not comply with an EU and UK ban on refunds for private use – although he may have been entitled to one for business.”
It seems that the UK is ripe with naming and shaming folks this week due to something called the Paradise Papers and Lewis has found himself in the middle of the debate over a VAT refund of over 3 million Pounds. He’s in good company as the Queen has been ensnared in the debate as well.
“If private usage of the jet is being disguised as business usage of the jet, then what you essentially have is a tax avoidance scheme,” says Rita De La Feria, professor of tax law at Leeds University.
“You’re using it for your own private interests, you’re going on holidays, meeting friends. You’re supposed to pay the tax on private consumption.”
If you’re anything like me, then you’ve seen wave after wave of social media posts over the years of Lewis sitting on top of his private jet, standing near it and otherwise hopping all around the world to hang out with friends and have a great time. It would seem those trips are meant to have a tax paid on them and perhaps the allegation is that Lewis hasn’t been doing so.
It’s a very convoluted process and the below graphic from the BBC tries to explain how Lewis worked the system for the VAT refund.
It seems that Lewis has a paper company, Stealth, that leases the jet to Stealth Aviation (if I have the facts correctly) and it all get cloudy from there to be honest. What we do know is that the BBC does a decent job of unpacking how all this tax avoidance works and let’s be honest, that’s not a bad strategy for a kid off a couch in Stevenage. I wonder if there is still a kid left in Stevenage that owns, oh…I don’t know, maybe an old Vauxhall and maybe they could open a company on the Isle of Man and get a few quid back for the trouble?
Check the link out below for all the muddy details on how Lewis does it. Let’s be honest, if there’s a loophole, someone is going to take advantage of it. The problem is that it may not be illegal but it very well could take serious liberties with the intent of the law and process. I’m just disappointed that he didn’t call his paper companies, Roscoe and Coco.
There’s a reason most drivers moved out of the UK throughout their career, the high tax rate. Is it a shocker that Lewis would take advantage of a system to reduce his expenses? No. Is it viewed favorably by the rest of the UK? I’ll leave that up to the folks in the UK to decide. I know I don’t look half as good in my Timberland’s sitting on top of my jet so there is that small detail.
Hat Tip: BBC
Who’d a thunk it. Mega rich people linked to ‘Tax avoidance’ schemes.
Nothing will change. Rinse, repeat, back in the news the next time is a ‘leak’.
Hi Tom, fortunately it does look like things do change as a result of these leaks. Gradually governments are working together to change the rules that allow corporations and individuals to avoid paying their fair share of tax.
“Governments” (the people that make’s-up the Governments of the time). When they are not trying to screw/bully one another they are working together mostly to safeguard what they are suppose to be governing. Nobody in his right mind believes that any Government does not know what is going on with their tax laws. the individual country laws as are of their own doing, when they build a law its like building a room, a room will always have a door so as people can go in and out, a window so as people can look in and out, and a… Read more »
So Salvu, I think you’re agreeing with me?
Hack, hacking, hacked, journalism, investigative journalism, leak, exposing.
In my book, hacking without consent is illegal, making use of something which is illegal is in itself illegal but it can lead to sainthood because of drilling a hole to cause a leak.
Tax evasion is illegal. Tax avoidance is legal. The proper word for in-between will be Tax optimization.
If the last option to not be Taxed was opening up an office on the moon, that would happen at a surprisingly short time.
AND JAKO, although out of topic on here, have you seen that battleship laying smokescreen yesterday?.
Okay, I think I get where you are coming from. I don’t really have a problem with the use of the hacked information. The hacking / leaking is a bit more problematic, but as you say if it leads to a good outcome it can be okay.
Though I’m not sure that the benefits to society of creating a tax free office on the moon would offset the harm that comes from the resulting ‘tax optimisation’.
Tax optimization as long as it’s legal can be done by the Pope as far as I am concerned and good luck to him.
Hacked information without permission is illegal, making use of hacked information which is illegal to expose legal optimization of tax is fraudulent journalism.
Yeah, I’ve seen the Hartley STR battleship laying its smokescreen around Interlagos, and some of the Tost and Abiteboul fall out since that.
It seems like the reliability of the Renault p.u’s has plummeted in the second half of the season. Presumably they have been pushing the energy production and delivery so hard that some components can’t handle it.
I really hope that a decision is made to increase the p.u allocation next year, as it doesn’t look like the reliability is there to drop to three next year (or four this year).
Although I have no doubt the PU manufacturers had already finalized, prepared and dyno proofed their 2018 PU’S reliability to cover a 3 engine/season supply I agree that it is going to be a struggle to get through the season with just 3 PU’S.
From what we’re seeing at the moment, unless they’re prepared to back off the power, Renault certainly don’t have a p.u that’s reliable enough to get through on a 3 p.u limit. Probably not Ferrari either, and Honda must be way off.
Very little said about what seems a sudden marked Honda improvement.
It’s true, they’ve been reliable and quicker than a GP2 ever since McLaren announced they were severing their contract.
I wonder if anyone at McLaren is having second thoughts?
Honda seems to have drastically improved their deployment over a longer distance of a lap. as the FIA findings said, all 4 are within acceptable limits of each other as regards PU outputs, and I for one never doubted that, what was and still is making all the difference is the ability to sustain that output over a lap distance and for lap after lap in a race.
Hmm but as the stuff around Apple explained. The loophole in Ireland was closed so it moved to the Cayman Islands. Governments may work together and close a group of them, but the lawyers will always find new ones.
Don’t hate the playa, hate the game!!!
I wonder how many others in the F1 paddock are involved in dodgy tax deals?
Yes we’re looking at you VJ…….
Once upon a time somebody hit the jackpot big time and it didn’t took him long to discover that water is wet. when the taxman got to him for not paying his tax he told him, why would rich people be paying tax if we have millions of middle class people for that and our democratic laws says that a person is allowed to do anything that is legal to minimize their tax.
Meanwhile, ALL of the world’s largest businesses continue to do the same or worse. Tax laws for people with money are really just another game of chess.
Regarding Lewis, Jay Z said it best, “I’m not a businessman, I’m a business, man”
Brand Management indeed.
How much is having fun and hanging out with your friends – – and how much is brand promotion and equity management?
Do what you love and you’ll never work a day in your life.
All legal (and yes, I have enough expertise in the area to express a sensible opinion). If people are stupid enough to leave loopholes, others are not stupid enough to leave them unexploited.
With your expertise in the area you’ll also know how difficult it is to write tax legislation (or F1 regulations) that some financially incentivised individuals can’t find loopholes in. Particularly when they can cherry pick from tax regimes in different countries. So not really a case of stupidity of the rule makers.
That’s the excuse that all tax legislators use. Frankly, it’s their job to set the rules. If they fall down on that job, it’s they who should take the blame.
And you don’t see any moral imperatives on citizens?
Oh but set the rules fairly and the Hounds of Hell appear
This tax papers hack puts paid to the hope of being given a big white horse plus shiny body armor and a big sward.
Oh, who cares?
If it was done withing the rules, who cares?
Other than those just wanting to hate someone and point fingers?
Grow up, people, and spend your time on something worthwhile.
Such as busting my ass to make up the taxes wealthy aholes don’t pay? Already doing that
Who cares?? I CARE. Taxes wealthy aholes don’t pay are taxes WE have to pay. Like sexual harrassment, this is gonna change. If you’re rich enough to have a freaking private jet you’re rich enough to pay the taxes on it (else you don’t get one). Tired of the excuse ‘oh they all do it, nothing can be done’ blah blah blah. Seriously, the top 1% have half the money in the world, the least they can do is pay their freaking taxes.
Sexual harassment is illegal. Period.
Paying the legal amount of tax is legal. Period.
Trying to conflate the two is inappropriate and doesn’t help anyone. It’s not just comparing apples and oranges, it’s comparing apples and chainsaws.
Is Chuck’s comparison not that societies attitudes to sexual harassment have changed, and he thinks attitudes to tax avoidance also need to change?