Paradise Papers reveal the F1 world champion’s advisers set up an offshore scheme through which he received €3.75 million in questionable VAT refunds. British tax authorities are set to launch an investigation.
Formula 1 world champion Lewis Hamilton avoided paying tax on his €19m private jet, according to documents released as part of the Paradise Papers .
The 32-year old was given a €3.75m VAT refund when importing the Bombadier Challenger 605 to the Isle of Man in 2013.
According to reports, accountancy firm EY and Appleby helped Hamilton and dozens of other wealthy clients to set-up phony leasing businesses through which they rented their own jets. The scheme is being investigated by HM Revenue and Customs.
Hamilton’s representatives have denied any wrongdoing, claiming that a tax consultancy reviewed the structure and found it to be lawful.
"As a global sportsman who pays tax in a large number of countries, Lewis relies upon a team of professional advisers who manage his affairs.” The statement read. "Those advisers have assured Lewis that everything is above board and the matter is now in the hands of his lawyers."
According to the documents, the jet, which Hamilton has posed alongside in various social media posts, was purchased by the racing driver’s Brtish Virgin Islands company. It was then leased to an artificial business based in the Isle of Man, through which Hamilton rented the jet for personal use.
Whilst legitimate tax avoidance schemes aren't illegal, experts claim this one is open to scrutiny, given that the business from which the jet was leased is artificial.
British tax authorities will begin their review of 231 tax refunds, at least one of which is Hamilton's, later this month. The news comes shortly after 32-year old was crowned F1 world champion for the fourth time in his career, at the end of October.