The former Radio 1 DJ Chris Moyles had claimed to be a second-hand car dealer in a bid to save £400,000 tax, a British Tax Tribunal has found. The court named Moyles and two other men as having taking part in a scheme called “Working Wheels” which counted “450 fund managers, celebrities and other high earners between 2006 and 2008” as members and allowed members to assert they had incurred large losses while working in the second-hand car trade . A published judgment from Judge Colin Bishopp, President of the Tax Chamber of the First-tier Tribunal, said Moyles’s self-assessment tax return for the financial year ending on April 5, 2008, when he was presenting Radio One’s Breakfast Show, said he “had engaged in self-employment as a used car trader”. The scheme was set up by NT Advisers, whose initials stand for “no tax”, in 2007. The DJ had appealed against an earlier HMRC ruling and claimed that Moyles had made a loss of £1 million selling £3,731 worth of used cars. Moyles paid £95,000 to enter the scheme
Moyles did not give evidence directly to the tribunal but did submit “a brief witness statement”. Judge Bishopp, described that evidence as “very brief and rather uninformative”. The judgment said: “It is however quite clear from the statement that he too entered the scheme for no purpose other than to achieve a tax saving, and that he took no interest in the trade.”
It went on to say that Mr Moyles was “anxious to be reassured that the scheme was lawful, and that he would not have to undertake any trading himself”. It said his accountant, Derek Smith, had “agreed that the scale of Moyles’s borrowing was driven solely by the amount of the tax loss he wanted to achieve, in his case £1 million, and that the trading was not carried on for its own sake but was merely a means to an end”. HMRC had said that that there was “no such trade in the relevant year, or any year”, and the tribunal judge agreed that it was “impossible to reach the conclusion that… this was a trade seriously pursued with a view to profit”.
Moyles later took to Twitter to give his side of the story. He said: “I want to comment about a recent tribunal tax ruling: “Upon advice, I signed up to a scheme which I was assured was legal. Despite this, my knowledge of the dealings of the scheme were naive. “I’m not a tax expert and acted on advice I was given. This was a mistake and I accept the ruling without reservation. I take full responsibility and have learnt a valuable lesson.”
Moyles also tried to keep his involvement in Working Wheels private. In court it was argued that his human rights would be breached and that his ‘career might be damaged and his earning capacity reduced’ if news of the case was made public. Judge Bishopp said that there was an “obvious public interest” in keeping taxes cases public and rejected the argument that adverse media comment would beach Moyles’ “right to respect for his private and family life” – saying that holding tax cases in private might leas the public to suspect that “riches or fame could buy anonymity”.
In a separate matter, HMRC are continuing to investigate the “Icebreaker” tax schemes that have been used by three members of Take That – Gary Barlow, Howard Donaldson and Mark Owen – and their manager Jonathan Wild. The legality of the scheme which, allowed members to borrow money to invest in music projects is yet to be agreed. Projects included an album of calming music called ‘Tranquil Moon’ (currently on sale for 89p) a Basque folk album and a collection of Irish Songs called ‘Celtic Skies’. It seems the Take That members put in a first tranche of £26 million and a second tranche of £40 million. The scheme will be tested at a Tax Tribunal with HMRC seeking to claw back tens of millions of pounds in tax from members of the schemes.