It was revealed this weekend that former BBC Radio 1 DJ Chris Moyles had posed as a used car dealer in a “highly artificial” bid to avoid Income Tax on around £1 million in earnings. During his stint as one of the BBC’s highest-paid stars, Moyles claimed his substantial earnings during 2008 had been offset by losses of more than £1 million trading used cars, his Self Assessment for the year claiming he was “engaged in self-employment as a used car trader.”
The scheme, known as “Working Wheels”, was marketed by a firm called NT Advisers (the NT stands for “No Tax”) and had a prestigious roster of around 450 celebrities and wealthy individuals. After Moyles’ defeat at a Tax Tribunal it is understood that the other participants in the scheme will be pursued by HMRC for avoided tax payments. If Moyles’ fellow tax avoiders had similar earnings, HMRC could recoup some £180 million.
Exchequer Secretary David Gauke remarked:
“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 Government has provided HMRC with the resources to tackle these avoidance schemes and HMRC will now pursue the other users of the scheme to make sure all the taxes that are due are paid.”
The resources provided by the Government include increasingly lavish anti-avoidance budgets which have netted HMRC record-breaking anti-avoidance revenues, but some have asked whether HMRC’s targeting of individuals and small businesses is misguided. The Government is also running a consultation (closing tonight) on tackling “marketed tax avoidance”, such as the Working Wheels scheme.