Economy

Lewis Hamilton, the F1 champion, saved money leasing £16m jet from himself

Lewis Hamilton, the F1 champion, saved money leasing £16m jet from himself”

Lewis Hamilton is making headlines again, though not because he recently clinched his fourth Formula One world championship in Mexico. Hamilton's lawyers say a tax barrister review found the structure was lawful and that it was not correct to say that no VAT had been paid on any of the arrangements. In Europe, VAT is calculated to be 20 percent of the purchase price.

Assuming Hamilton uses the plane for personal use one third of the time, he should have declared at least one third - £1.1m - of the £3.3m he saved on Value-Added Tax, according to the German newspaper Süddeutsche Zeitung, which obtained the 13.4m Paradise Papers documents and shared them with the International Consortium of Investigative Journalists.

Legitimate tax avoidance schemes are legal, and there is no suggestion Hamilton was involved in creating avoidance schemes. The Mercedes-AMG Petronas driver's leasing agreement stated that Hamilton would use the jet for 80 hours per month, while his company, Stealth Limited, would use it for 160 hours.

The paper reported he was not concerned with managing his business on a day-to-day basis and relied on professional advice. However, experts noted that the scheme allowed him to avoid tax that would have otherwise been due.

According to the so-called "Paradise Papers", Hamilton, 32, bought a £16 million Bombardier CL605 Challenger in 2013 through a series of offshore companies domiciled in the British Virgin Islands, Guernsey and the Isle of Man.

Hamilton appears to have set up another Isle of Man company to buy a £1.5m motorhome that he used at racetracks. No VAT appears to have been paid on that purchase either. Lawyer's representing the four-time F1 champion told the BBC that a "set of professionals in place who run most aspects of his business operations and that no subterfuge or improper levels of secrecy had been put in place".

Following questions from the Guardian, the Isle of Man government called in HM Revenue and Customs.

He appears to have received a 100% import VAT refund when experts say he should have paid tax in proportion to the amount of private use he meant to make. They claim there were no tax advantages to using the Isle of Man as opposed to the United Kingdom or another European Union member state for the import.



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