Dominic Chappell, who bought BHS for £1 in 2015, has been found guilty of evading tax of £584,000. He has been jailed for six years.
A criminal investigation by HM Revenue and Customs (HMRC) revealed Chappell, 53, of Winterborne Clenston, Dorset, deliberately evaded VAT and Corporation Tax payments for his personal services company, Swiss Rock Limited, and did not disclose dividend income.
Chappell provided consultancy services through Swiss Rock Limited to facilitate the purchase of BHS by Retail Acquisitions Limited, 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 revealed the company’s sales invoices totalled £2.3 million, meaning he was liable for £351,944 in VAT. He paid just £8,433.
The 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 Swiss Rock Limited, which entered liquidation in 2016. The Income Tax evaded on the dividend totalled £86,163.
The court heard, that despite mounting debt, Chappell splashed out on luxuries including yachts, expensive cars, and holidays.
Simon York, Director, Fraud Investigation Service, HMRC, said:
“This was deliberate theft from UK citizens. 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.”
Dominic Chappell denied the offences during a hearing in June 2019. He was found guilty and sentenced today (5 November 2020) following a four-week trial at Southwark Crown Court, prosecuted by the Crown Prosecution Service. Chappell will serve half on licence.