Four-time Formula One champion Lewis Hamilton reportedly avoided paying value-added tax on his £16.5 million private jet.
According to the Paradise Papers, four-time Formula One champion Lewis Hamilton, 32, reportedly avoided paying value-added tax on his £16.5 million (≈$21.6 million) private jet that he bought in 2013.
Documents show that after Hamilton’s newly purchased Bombardier Challenger 605 was imported into the Isle of Man after he bought it in 2013, he was issued a £3.3 million (≈$4.3 million) value-added tax refund.
Following these allegations, an unnamed representative of Hamilton issued a public statement about the matter, and it said the following:
"“As a global sportsman who pays tax in a large number of countries, Lewis [Hamilton] relies upon a team of professional advisers who manage his affairs. Those advisers have assured Lewis that everything is above board and the matter is now in the hands of his lawyers.”"
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According to the BBC, Hamilton’s planned purpose of owning the private jet was for business purposes. However, there was also reason to believe that he intended to use the jet for private purposes about one-third of time, which there is evidence that he had been doing. That evidence includes numerous photos of him on his jet on his own personal Instagram page.
According to Rita De La Feria, a professor of tax law at Leeds University in the United Kingdom, the fact that it looks like his advisers set up an artificial leasing deal that did not comply with a ban on private use refunds in the EU and the UK is the reason that this tax avoidance case is an issue.
"“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. 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.”"
Hamilton has been a full-time Formula One driver since the 2007 season, and he won his first of four championships in 2008. He just secured his fourth career title and his third in the last four years in last week’s Mexican Grand Prix.
Next: Looking back at Lewis Hamilton's record-setting accomplishment
Lewis Hamilton is the all-time Formula One pole position recordholder with 72 poles, as he just tied and passed the great Michael Schumacher’s previous record of 68. He trails only Schumacher on the all-time wins list with 62 victories, as Schumacher won 91 races, and he trails only Schumacher and Juan Manuel Fangio on the all-time championships list. Schumacher won seven titles, while Fangio won five. How will these tax allegations affect Hamilton, if at all, moving forward?