Matalan founder John Hargreaves loses multi-million pound tax avoidance battle

Matalan founder John Hargreaves has lost a court battle with HMRC over his bid to avoid a tax bill of up to £135million.

The Monaco-based retail boss was ordered to pay after a court ruled he owed capital gains tax in relation to his £231million sale of the retailer whose the head office was located in Merseyside in 2000.

Mr Hargreaves has been in conflict with officials over his tax status for nearly 20 years, BusinessLive reports.

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Mr Hargreaves, 78, launched the brand as a boutique in Preston in 1985 before moving to Monaco two years after listing it on the London Stock Exchange in 1998.

He submitted a P85 form to HMRC outlining his tax haven status four days after arriving and signed a lease for an apartment six months later.

Court documents said: ‘Part of Mr Hargreaves’ purpose in moving to Monaco was to ensure that he was no longer resident in the UK for tax purposes so that he could dispose of shares without becoming subject to capital gains tax.

Mr Hargreaves continued to sell Matalan shares in May 2000.

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Court documents reveal he failed to complete the capital gains pages on his tax return because he did not consider himself a UK resident.

However, he continued to spend time in the UK and worked at Liverpool three days a week as executive chairman of Matalan. He also maintained property in the UK.

Tax officials began investigating Mr Hargreaves’ tax affairs in 2004 but missed the deadline to open an investigation by December 31, 2003.

The company was again privatized by the Hargreaves family in October 2006.

In 2007, HMRC concluded that Mr Hargreaves owed £84 million in additional tax for the year 2000-01 after spending 152 days in the UK during that period.

The businessman has previously argued he was not a UK tax resident when he sold the shares and has also previously said the tax bill was not valid as HMRC missed its deadline. investigation.

A final sum has not been revealed but it could be as high as £135m.

The Upper Tier Court – the highest court that oversees tax cases – ruled against Mr Hargreaves’ latest appeal on February 11.

He has three weeks to bring the case before the court of appeal.

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