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BUSINESS COMMENT

Bernie Ecclestone fraud case shows HMRC must net more of the bigger fish

Tax fraud is too often a David versus Goliath battle between relatively low-paid civil servants and wealthy figures who can afford top advice, argues Chris Blackhurst

Friday 13 October 2023 18:58 BST
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Bernie Ecclestone arrives at Southwark Crown Court on Thursday
Bernie Ecclestone arrives at Southwark Crown Court on Thursday (PA Wire)

Let us hope that in years to come, when they attend their training courses, junior government prosecutors and HMRC officials are presented with a case study of the Bernie Ecclestone prosecution.

There he was, one of the richest, best-connected people in the country, friendly with world rulers and leaders, able to draw upon the firepower of the smartest lawyers and advisers, and the tax authorities kept going and going. For 11 years, from the moment they first opened a file on the F1 kingpin, and eight years from the point when he was asked if he was involved with any trusts, apart from the one he’d set up for his daughters. Along the arduous route, they had to endure all manner of twisting and turning – and still, they pressed on.

The stakes were high. Ecclestone is a master player of the media and politicians, someone plugged into the most high-powered of networks. Get it wrong, and the public servants would have known they could expect a broadside from the ferocious Ecclestone, and their jobs would be on the line. Yet again, we would find ourselves asking if it was right for the tax inspectors to pursue this presumably upright figure, a multibillionaire who transformed motor racing into one of the glitziest sports on the planet.

They would be accused of throwing good money, our money, taxpayers’ money, after bad. They would be said to be motivated by jealousy, of trying to take down an incredibly tall poppy, a great individual success story of the type we should be celebrating, not destroying.

A flavour of what they must have gone through can be gleaned from what was revealed when finally Ecclestone pleaded guilty. The tycoon tried to claim he was only being prosecuted because on TV in June 2022, after the Russian invasion of Ukraine, Ecclestone said he would “take a bullet” for Vladimir Putin and described the president as “a first-class person”.

His lawyer, Clare Montgomery KC, claimed he was charged a week after he made these “extremely unpopular” remarks about Putin. “We will be submitting, on the face of it, the assumption he was being prosecuted because of that, rather than the legitimate public interest criteria.”

Fortunately, HMRC and the court preferred to stick to the public interest in bringing to justice someone who had trusts in Singapore, and a bank account holding £400m, far away from the clutches of the UK tax collectors.

Montgomery also argued that her client should not stand trial because, in the opinion of an eminent (naturally) cardiologist, the stress of the proceedings could kill him. Professor Charles Knight said that Ecclestone suffers from coronary heart disease, hypertension and diabetes. His risk of death within 12 months was 30 per cent, with the strain of a trial doubling this – meaning, “on the balance of probabilities, the chance of death during the period of the proceedings is over 50 per cent”. That, too, was dismissed.

Whatever else occurred is contained in the legal files. Hopefully, they will be used as a template for trainees, in pressing on regardless. We need more Ecclestone-type prosecutions. For too long, our state investigators have not dared to pursue the biggest fish.

To be fair, they’ve lacked the resources. This was very much a David versus Goliath battle, the relatively low-paid civil servants grappling with Ecclestone and his big guns.

Hopefully, it will embolden the Treasury to release more funds, so that we can take white-collar crime, and major fraud in particular, seriously.

Ecclestone pleaded guilty to sheltering £416m from HMRC. It was the biggest personal fraud in British history. For that, he received a 17-month jail term – suspended for two years – and paid almost £653m in settlement of unpaid tax, interest and penalties. He’s free to enjoy the remainder of his estimated £2.4bn fortune.

It’s been presented in some quarters as a “victory” for him, in that he managed to stay out of jail. But he is 92 years old, 93 next month. Quite what would be achieved by asking the overstretched prison service to look after a person of his vintage, who would also be a newcomer to the penal system, is difficult to fathom.

The judge, Mr Justice Simon Bryan, took into account his age, his medical conditions, and the impact a custodial sentence would have on his young son, and spared him that ordeal. Make no mistake, though: Ecclestone is humiliated.

It also transpires that this was not the first occasion on which he’d fallen foul of the Inland Revenue. The court was informed that he’d previously admitted fraud for 2007-2008 over non-payment of tax on a property deal. That makes him a repeat tax dodger. In 2015, he was posed a direct question by HMRC and provided a simple answer. He said “No” when asked about the existence of further trusts. It was a lie, since Ecclestone was linked to two in Singapore, called Kinan and Nanki, that he used for foreign currency trading.

By fibbing, he took the chance that the tax inspectors would believe him and cease their inquiries. They had already been looking into his tax affairs for three years by this point.

The meeting between Ecclestone and HMRC officers took place – said Richard Wright KC, prosecuting – because the Grand Prix boss was “seeking to a draw a line under investigations into his tax affairs”. Wright added: “He was fed up of paying huge bills for advice.”

Having said what he said, Ecclestone had “ample time”, by the HMRC’s account, to be honest about his tax arrangements. He chose not to be. In the end, even the mighty Bernie Ecclestone ran out of road.

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