Dominic Chappell, the businessman who bought UK retailer BHS from multimillionaire Philip Green for £1 in 2015, has been jailed for six years after being convicted of tax evasion.
Chappell, 53, who headed BHS as it collapsed in 2016, was found guilty of three counts of failing to pay a total of £584,000 in tax by a jury at Southwark Crown Court on Thursday and sentenced shortly afterwards.
Prosecutors had told the trial that the former racing driver “dishonestly chose” to evade paying corporation tax, income tax and value added tax on £2.2m of income he and his companies received from the acquisition of BHS.
He instead used it to fund a lavish lifestyle including buying a Bentley car, a yacht called Maverick, a holiday in the Bahamas and several Beretta guns.
During his defence Chappell, a former bankrupt, sought to blame Sir Philip, the former owner of BHS, for his financial problems, claiming that the Arcadia tycoon had misled him on promises to fix the BHS pension fund deficit and “refused point blank” to allow him to see pension documents before the BHS sale went through.
Chappell also described his wrangles over a supplier at “a typical Sir Philip Green meeting” with “lots of shouting . . . lots of swearing and lots of intimidatory bullying tactics”.
He also tried to blame Sir Philip for scuppering a last-minute sale of BHS by Chappell to billionaire Mike Ashley in 2016 because he “couldn’t entertain the notion of selling to a competitor”, he claimed.
Chappell, of Blandford Forum, Dorset, bought a £90,000 Bentley on the day he was liable to pay £86,000 in tax revenue, the trial heard. He also testified that he has debts of about £20m.
Details of Chappell’s spending between March and April 2015 were disclosed to the jury during the trial. It showed he paid his then wife £95,000 and spent £114,000 on vehicles and spent £4,179 on expenses abroad as well as spending £38,000 on household expenses.
“I am having to slum it in the Bahamas for the next three weeks,” read an email from Chappell to a friend that was shown to the court. “I know you all feel my pain.”
Prosecutors said Chappell submitted a “lying” and “false” document put forward to fellow directors at the time of the BHS deal suggesting his net worth was £20m. When Chappell was subsequently questioned about the statement by investigators, he suggested that his secretary may have put the decimal point in the wrong place, the court was told.
The day after the BHS deal was completed in March 2015, £300,000 was paid into Chappell’s personal bank account from that of one of his companies, the court heard.
Simon York, director of fraud investigation services at HM Revenue & Customs, said that 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,” he said.
When BHS collapsed, its pension scheme had a £571m financial hole. The jury heard that Sir Philip reached agreement with the Pension Regulator in 2017 to pay £363m into the BHS pension scheme and that the Pension Regulator has ordered Chappell to pay £9.54m into the BHS pension fund.