// Dominic Chappell tells court he should “never have touched” the BHS deal “with a barge pole”
// He blames his financial advisers & Sir Philip Green as he denied dishonestly choosing to evade paying tax
Dominic Chappell has said he was let down by financial advisers and Sir Philip Green as he denied dishonestly choosing to evade paying tax on £2.2 million of income he received from the deal to buy BHS.
Chappell, who owned BHS for just 13 months before its collapse in 2016, described the deal which controversially saw his consortium buy the loss-making retailer for £1 from Green as “a lifechanging catastrophe”.
He also said he should “never have touched it with a barge pole”.
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Chappell is being tried at London’s Southwark Crown Court on three charges of cheating the public revenue relating to his bankrupt finance company Swiss Rock Ltd.
He denies the charges.
Chappell repeatedly told the court he was “not an accountant” and was relying on the advice of his professional financial experts to deal with the situation as he was “firefighting” the pending collapse of BHS, causing the loss of 11,000 jobs.
His defence argued that BHS was forced into liquidation because of the actions of Green in reneging on promises of financial support for the retailer’s pension fund and going back on a promise to provide working capital after the deal was made.
Chappell’s defence suggested that had BHS not failed, he would have had the funds to pay his tax liability.
His lawyers said he became, and still is, “utterly broke” after BHS’s hugely underfunded “pension problem exploded” within two weeks of him buying the firm from Green in 2015.
Looking back now on the BHS deal, Chappell told the jury: “It was a lifechanging catastrophe. I would never have touched it with a barge pole.
“We were given forged and misleading documents by PricewaterhouseCoopers (PwC). I was lied to by Sir Philip Green, as were my board.
“This catastrophe has cost me my marriage, my money and my reputation.”
Chappell told the court he was “lied to” by PwC, who were BHS’s auditors.
He said its information about the state of the retailer “was not a true reflection” of what was going on.
Chappell is charged with dishonesty regarding VAT, corporation tax and income tax between January 2014 and September 2016.
Prosecutors argued that instead of paying the tax he knew was due, Chappell spent a fortune on a luxury lifestyle which included a yacht, a Bentley Continental car and some expensive Beretta guns.
BHS was losing £1 million a week and had a £250 million to £500 million pension deficit when Chappell’s consortium bought it in March 2015.
It limped on before collapsing in April 2016.
Chappell told the court that he did not dodge paying his taxes and whatever was due would be paid as soon as he could reconcile the accounts, which he feared had been drawn up incorrectly.
He said he had increasingly lost trust in the ability of his accountants.
Cross-examining, prosecutor Mark Bryant-Heron QC said Chappell had “filled your boots” on luxuries such as a boat, which left no money to pay taxes.
Chappell said that “if there was tax due (at that point) I could have paid it”.
He said he and his team were working hard on a “very difficult and challenging” project to try to turn around BHS.
Chappell is charged with providing false or misleading information and also failing to submit VAT returns.
It is alleged that Chappell did not arrange for the correct VAT amounts to be registered and he also did not pay VAT.
Chappell is also accused of failing to pay corporation tax as well as personal income tax from dividends he received from Swiss Rock.
When Swiss Rock’s VAT became due in December 2015, Chappell said he was unaware of the VAT position, there was confusion about invoices and information from HMRC.
“I just left it to the experts to deal with it. I just did what I was advised to do,” he told the court.
He added: “I simply ran out of bandwidth to deal with it. I was living away from home, working from dusk till dawn. It was very, very difficult times.”
with PA Wires
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