Former Formula One boss to pay record £652 million ($1.3 billion) after admitting failure to declare overseas assets to UK authorities Former Formula One boss Bernie Ecclestone has been given a suspended prison sentence after pleading guilty to a tax fraud charge and agreeing to pay a £652m civil settlement
Former Formula One boss Bernie Ecclestone to pay $1.3b in civil settlement after pleading guilty to tax fraud
By Jane Croft and Emma Agyemang
Financial Times·
4 mins to read
Former Formula One boss Bernie Ecclestone has avoided jail. Photo / Photosport
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Andrew Park, tax partner at accountancy firm Price Bailey, said he thought the tax penalty and overall settlement amount was the largest on record. “I can’t think of anything on the same scale,” he added.
Ray McCann, a tax consultant and former HMRC inspector, also said the £330m that Ecclestone paid in penalties was “without a doubt the biggest penalty” in history.
Ecclestone faced allegations that in July 2015 he dishonestly made a false representation to the UK tax authorities that he had only set up a single trust in favour of his daughters, and that he was not the settlor or beneficiary of any other trust in or outside the UK.
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Prosecutor Richard Wright KC told the court that as part of an HMRC investigation, Ecclestone and his advisers had sat down with the department in May 2015 to resolve an ongoing probe into his tax affairs, which started in 2012, to save “huge bills for advice”.
Ecclestone had been offered the chance to correct any mistakes in his tax and pay what was owed plus a penalty through a HMRC formal civil process known as a contractual disclosure facility or a COP9.
The COP9 process requires the taxpayer to make a “full, open and honest” disclosure or face a criminal investigation.
Ecclestone was asked at the 2015 meeting with HMRC whether he was the linked beneficiary to any other trusts outside the UK to which he replied “no”. In reality he was linked to two trusts outside the UK, the court heard.
Wright told the court that Ecclestone at the time “did not know the true position” and although he was aware of the trust accounts “Mr Ecclestone was not entirely clear how the ownership was structured”.
“He did not know whether he was liable for tax, interest or penalties in relation to amounts passing through the accounts,” Wright added to the court.
Sentencing him on Thursday, Mr Justice Simon Bryan told Ecclestone that he had “attempted to manipulate or subvert” the HMRC investigation by telling a “lie” at the 2015 meeting.
The judge said the “offending was so serious that neither a fine or a community order would be appropriate” and said “the custody threshold had been passed”.
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However, Bryan said he would pass a suspended sentence in the light of various mitigating factors including Ecclestone’s health, age, lack of previous convictions and the civil settlement with HMRC.
Clare Montgomery KC, defending Ecclestone, argued that her client ought to receive a suspended sentence partly due to the 92-year-old’s “frail” health and because the £652m civil settlement was “a very significant financial penalty”.
She said she accepted the offending was “serious” but said it represented an “impulsive lapse of judgment which happened eight years ago”.
Montgomery added that Ecclestone “bitterly regrets” the events that had led up to the criminal trial.
Richard Las, chief investigation officer and director of HMRC’s fraud investigation service, said: “Bernie Ecclestone has had ample time and numerous opportunities to take responsibility and be honest with HMRC about his tax affairs. Instead of taking these opportunities, he lied to HMRC and as a result we opened a criminal investigation.”
Written by: Jane Croft and Emma Agyemang
© Financial Times
