Dominic Chappell, the entrepreneur who bought BHS for £1 in 2015, has been found guilty of evading tax of £584,000 and jailed for six years
A criminal investigation by HMRC found that Chappell had deliberately evaded VAT and corporation tax payments for his personal services company, Swiss Rock Ltd (SRL), and did not disclose dividend income.
Chappell provided consultancy services through SRL to facilitate the purchase of BHS by Retail Acquisitions Ltd, where he was a director.
Chappell failed to submit VAT returns for a 17-month period from March 2015, evading £343,511. HMRC’s investigation discovered the company’s sales invoices totalled £2.3m, meaning he was liable for £351,944 in VAT, but had paid only £8,433.
The former racing driver turned businessman also paid just £10,000 of £164,064 in corporation tax due to HMRC and neglected to notify HMRC of a £330,000 dividend paid to him through SRL, which entered liquidation in 2016.
The income tax evaded on the dividend totalled £86,163.
The court was told, that despite mounting debt, Chappell splashed out on luxuries including yachts, expensive cars, and holidays.
Simon York, Director, fraud investigation service, HMRC, said: ‘Chappell was a high-profile businessman who knew tax had to be paid on his income and profits but chose not to do so.
‘That’s money that should have been supporting our vital public services instead of funding his lavish lifestyle.
‘Today’s result sends a clear message to the minority who commit tax crime that no matter who you are or what resources you have at your disposal, no one is beyond our reach.’
Chappell denied the offences during a hearing in June 2019. He was found guilty and later sentenced following a four-week trial at Southwark Crown Court, prosecuted by the Crown Prosecution Service. Chappell will serve half on licence.
Chappell’s purchase of BHS from Sir Philip Green for £1 in March 2015 was highly controversial.
Twelve months later, the high street chain store collapsed, with the loss of 11,000 jobs and a £571m pensions deficit.
Green was heavily criticised over the sale, and subsequently agreed with the Pensions Regulator to pay £363m to help prop up the pension scheme.
Earlier this year, Chappell was ordered to pay £9.5m into BHS pension schemes.
In 2019, he was banned from running a company for 10 years after an Insolvency Service investigation found he had carried out ‘reckless financial transactions’ and ‘failed to maintain adequate company records’.