Disgraced BHS owner ‘chose NOT to pay tax’
SFO alerted after damning report into business of Dominic Chappell
DOMINIC Chappell’s private company appears to have made a ‘deliberate decision’ not to pay its tax and VAT bills and instead chose to pay out hundreds of thousands of pounds in dividends to Chappell, according to a report prepared for MPs.
The study by accountancy professor Prem Sikka, commissioned by the Work and Pensions Committee, called for the Serious Fraud Office to be alerted to his findings and for MPs and investigators to probe in detail any firm ever owned by Chappell.
Frank Field MP, the committee’s chairman, told The Mail on Sunday this weekend he had forwarded Prof Sikka’s report to SFO director David Green with a letter raising his own ‘concerns’ about its contents. Prof Sikka, from the University of Essex, who examined the accounts of Chappell’s firm Swiss Rock Ltd, said in his report: ‘In the absence of more information, it appears directors made a deliberate decision not to pay VAT and corporation tax liabilities.’
The report points out that VAT was not paid quarterly as would be typical. Nor did the accounts show any dispute with HMRC over the amount of VAT due. Prof Sikka concluded the directors of Swiss Rock, who include Chappell, chose not to settle their VAT bill. He added: ‘Instead, the firm chose to pay an interim dividend of £363,000 to Dominic Chappell and Olivia Investments.’
Olivia Investments was another private company controlled by Chappell.
Chappell led the buyout of BHS from Sir Philip Green in 2015 and the retailer collapsed less than a year later, with a pension deficit of £571million.
Swiss Rock itself went into liquidation last month owing over half a million pounds in tax and VAT, according to the Revenue. But Prof Sikka says in the report he filed ten days ago: ‘The loss to HMRC is in the region of £733,000 and could be higher.’
Prof Sikka also highlighted loans made by Swiss Rock which may not be recovered and which would leave HMRC as the ‘biggest loser’ from the affair.
One of the loans made by Swiss Rock was to Paul Sutton for £623,000, then a business associate of Chappell. The pair have since fallen out.
A separate loan to a third party firm for £262,000 is also outstanding. Both are marked ‘uncertain’ in the administrator’s report of September 2, which
means they may never be recovered. Swiss Rock was registered at Companies House as a financial intermediary and Chappell’s father Joseph was a director.
The Revenue filed a petition to wind it up in July, soon after BHS’s collapse.
The study examines the only set of accounts filed by Swiss Rock, which cover the period from January 2014 to April 2015. Chappell declined to comment.
The Mail on Sunday understands Chappell and his advisers are preparing to file additional information relating to the accounts.
The SFO has yet to launch a formal investigation, but is looking into the events surrounding the BHS collapse. A preliminary report from the SFO to MPs was due on Friday but has not yet been received.