HM Revenue & Customs (HMRC) has won a legal battle against a £290 million tax avoidance scheme sold to 450 individuals, including former Radio One DJ Chris Moyles and fund managers.
The First Tier Tribunal found against the tax avoidance scheme which involved celebrities, fund managers and other high earners claiming that they were second-hand car dealers in their spare time. Along with Moyles, Eoghan Flanagan and Alan Stennett were among the three indivduals named.
The scheme allowed its members to say they incurred large fees working in the car trade, which could then be set against their tax bill.
Moyles (pictured) took to Twitter to admit he had been naïve in joining the scheme.
He wrote: ‘Upon advice, I signed up to a scheme which I was assured was legal. Despite this, my knowledge of the dealings of the scheme were naïve.
‘I'm not a tax expert and acted on advice I was given. This was a mistake and I accept the ruling without reservation.
This is HMRC's fourth consecutive win against the scheme’s promoters NT Advisors.
NT Advisors sold the ‘Working Wheels’ scheme to 450 individuals between 2006 and 2008.
The tribunal said that a realistic view of the facts showed that the appellants’ aim was to make it appear 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 tribunal heard that Moyles had wanted to achieve £1 million in tax losses.
Exchequer secretary David Gauke said the case was 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,’ he said.
HMRC will now pursue the other users of the scheme to make sure all the taxes that are due are paid.