Dominic Chappell, the former owner of BHS, has been sentenced to six years in jail for tax evasion.
Following a four-week trial at Southwark Crown Court, Chappell was found guilty of failing to pay £584,000 in tax on income he received from his takeover of BHS.
Chappell bought BHS from billionaire Sir Philip Green for £1 in March 2015.
A criminal investigation by HM Revenue and Customs (HMRC) found Chappell “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.
According to HMRC, he failed to submit VAT returns for a 17-month period from March 2015, evading £343,511.
HMRC’s investigation found the company’s sales invoices totalled £2.3m, meaning he was liable for £351,944 in VAT but he paid just £8,433.
The businessman also paid just £10,000 of £164,064 in corporation tax and failed 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 the businessman spent the money on yachts, expensive cars and holidays, despite mounting debt at the retailer.
Simon York, director of Fraud Investigation Service at 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.”
Chappell denied the offences during a hearing in June 2019 but was found guilty and sentenced yesterday (November 5) at Southwark Crown Court. He will serve half on licence.
BHS went into administration in April 2016, putting workers' retirement nest eggs at risk and leading to TPR investigating the case.
In January, Chappell was ordered to pay £9.5m into two pension schemes related to BHS after he lost his appeal against the regulator's ruling.
In 2017 a £363m settlement with Sir Philip was reached to fund a new independent pension scheme for 19,000 former BHS workers.
What do you think about the issues raised by this story? Email us on firstname.lastname@example.org to let us know