New documentary claims HMRC did a secret deal with Bernie Ecclestone allowing him to settle a £2 billion tax dispute with a payment of £10 million
The Inland Revenue made a secret deal with Bernie Ecclestone allowing him to settle a £2 billion tax bill for just £10 million, it has been alleged.
HMRC spent nine years investigating the tax affairs of the Formula One supremo and his family after he transferred a large portion of his assets to his then wife Slavica in 1996.
The money was later transferred into one of the Ecclestone family trusts based in Liechtenstein.
Mr Ecclestone always denied having any control over the trusts, but admitted his tax liability would have been in excess of £2 billion if it could be shown he had some involvement in the funds.
It has now emerged that after splitting from his 6ft 2in second wife in 2009, Mr Ecclestone has been receiving payments from her worth £60 million a year.
The 83-year-old is currently on trial in Munich, accused of paying a £26 million bribe to a German banker to help safeguard his supremacy in F1 when the sport was sold in 2006.
Among the documents lodged with the court were details of Mr Ecclestone’s complex divorce settlement, which have seen him receive around £300 million from his ex-wife since 2009.
An investigation by BBC Panorama claims the HMRC were pursuing Mr Ecclestone for a tax bill of £2 billion, but allowed him to settle for £10 million, in what could be the “biggest ever personal tax dodge”.
Emily Thornberry MP, the shadow attorney general, has called for a new investigation into Mr Ecclestone by HMRC.
She said: “Ten million may sound like a lot to some people but you have to look at it in the round. And if we're talking about a trust fund in which they are making huge amounts of money like this, then it isn't very much is it?”
Tax barrister Jolyon Maugham told the BBC it could be the biggest case of tax avoidance involving an individual in Britain.
He said: “Two billion is a pretty substantial loss of tax. I'm certainly not aware of anything else remotely approaching that sort of magnitude, in my fairly extensive experience.”
Mr Ecclestone had claimed he had given away his fortune to avoid inheritance tax laws which he considered unfair.
Swiss lawyer Frederique Flournoy disclosed details of the regular payments to Mr Ecclestone from his ex-wife and also revealed that the HMRC had reached a secret deal with the motor racing boss.
She said: “The Inland Revenue offered to conclude the matter if we paid 10 million pounds. Without knowing the legal basis that had given rise to this offer, we decided to pay up, without discussing things in great detail.”
Mr Ecclestone declined to answer any of Panorama’s questions about his relationship with the family trusts.
But he did say he personally paid almost fifty-two million pounds in tax last year and had always paid his fair share.
In a statement, a lawyer for the Ecclestone family trusts said: “Mr Ecclestone has not exerted, and has never sought to exert, any control over the management of the trusts”.
A spokesman for the HMRC said: "We are unable to discuss the confidential tax affairs of identifiable individuals or businesses.
"The settlement of all disputes is governed by HMRC’s published litigation and settlement strategy, which ensures that we only settle for the tax that is owed and which would otherwise be achieved through litigation.
"The way in which HMRC settles and assures tax disputes has been completely overhauled in recent years, making the process more transparent.
"The effectiveness and propriety of such settlements is overseen by a Tax Assurance Commissioner, who publishes an annual report covering all large settlement cases.”