Lewis Hamilton Named in Paradise Papers for Avoiding Tax on $21M Jet
Lewis Hamilton, the recently-crowned four-time Formula One World Champion, avoided paying tax on his private luxury jet worth £16.5 million (approximately $21 million USD). The so-called “Paradise Papers” showed he received a £3.3m VAT refund for the red Bombardier Challenger 605 after it was imported into the Isle of Man.
According to The Guardian, Hamilton’s fortune is worth £130 million, making him the 10th highest-paid athlete in the world. Reportedly, he used companies in the British Virgin Islands, the Isle of Man, and Guernsey to reclaim £3.3 million in VAT when he imported the luxury jet from Canada in 2013. The British Formula One driver may have also avoided paying tax on a £1.7m motorhome he uses at race tracks.
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Hamilton says he does not oversee the day-to-day management of his business and that his lawyers had informed him his tax arrangements were legal. Legitimate tax avoidance schemes are not illegal and it is highly possible Hamilton was not directly involved in creating the scheme used for his jet.
Nonetheless, the tax break remains questionable. The BBC says that while Hamilton’s planned use of the jet was predominantly for business purposes, it has seen documents that suggest it is actually used for private flights about a third of the time.
“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,” said 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.”
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