Lewis Hamilton is making headlines again, though not because he recently clinched his fourth Formula One world championship in Mexico.
Hamilton apparently avoided the European Union’s 20 percent value added tax (VAT) when he imported his Bombardier Challenger 605 private jet through the Isle of Man in 2013, according to the BBC, citing documents from the Paradise Papers.
Although neither the EU nor U.K. allow VAT refunds for private use, the documents reportedly show that Hamilton received £3.3 million ($4.5 million) upon importing the £16.5-million ($21.73 million) plane. The Mercedes-AMG Petronas driver’s leasing agreement stated that Hamilton would use the jet for 80 hours per month, while his company, Stealth Limited, would use it for 160 hours.
The Paradise Papers outline upward of 50 schemes like the one Hamilton used, which saw Stealth Limited import the jet that it leased from Hamilton’s company in the British Virgin Islands, Stealth Aviation Limited, lowering the VAT. Lawyer’s representing the four-time F1 champion told the BBC that a “set of professionals in place who run most aspects of his business operations and that no subterfuge or improper levels of secrecy had been put in place.”
Hamilton’s lawyers argue, even if his intention was to lease rather than purchase, that isn’t illegal. Some legal experts, however, suggest that the lease arrangement itself could be 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,” Rita De La Feria, professor of tax law at Leeds University, said.
Regardless of whether the means by which Hamilton received his VAT refund was on the up-and-up, he seemingly was aware the scheme was in place. In the leaked emails from the offshore law firm Appleby, Hamilton’s lawyers mention that they would like to “email Lewis his agreement” and call him to “talk him through it.”
Thumbnail photo via Twitter/@LewisHamilton