Loan shark avoided tax on £1.4m
Paul Nicholson, who was jailed in 2009 for raping, blackmailing and assaulting his poverty-stricken clients in Cheshire, used the strategy to avoid paying £1.4m on his illicit earnings.
The Liberty tax strategy generated significant artificial ‘losses’ offshore which members could then use to avoid paying tax on their other income.
HMRC has investigated Liberty, which was legal, for more than a decade, while they are due to challenge the scheme in court come March next year.
Nicholson made £2.7m from his firm Falcon Securities by charging clients up to 125% interest before threatening them with knuckle dusters and baseball bats if they didn’t pay up.
In one case, he reportedly drove a female victim to a cashpoint to prove she had no money, before forcing her to clear her 11 year old son’s account.
He allowed his female victims to pay in sexual favours, while 800 of his victims across Runcorn and Widnes turned to prostitution to raise the cash.
One victim, 22 year old Brian Shields, hung himself after a loan of £300 increased to £3,000 in 12 weeks.
In 2009 Nicholson was found guilty of 12 counts of blackmail and rape, actual bodily harm, operating without a licence, lying to obtain a licence and acquiring criminal property at a trial.
The former nightclub bouncer was introduced to the scheme by BWCS Partnership, a Cheshire-based tax practice.
After being jailed he was stripped of his ill gained assets, which included a mansion in Delamere, a Porche sports car, a Landrover, quad bikes, Honda motorcycle, two horses and expensive jewellery, including a £5,500 Rolex watch.
He was described in Warrington Crown Court as displaying “human greed in its purest form” according to the Liverpool Echo at the time.
The Times reported that others who were part of tax avoidance included actor Sir Michael Caine, who allegedly tried to shelter £600,000, singer George Michael, Take That singer Gary Barlow, presenter Anne Robinson and former Tottenham Hotspur footballer Darren Anderton.
Michael reportedly wanted to shelter £6.2m in record and tour sales, while four members of the Arctic Monkeys were also said to have also paid into the shelter.
Singer Katie Melua sought to shelter £500,000 through the scheme in 2008, yet her lawyers claim this was on advice from her accountants, adding that she has now repaid the money back to the HMRC in full.
In total 1,600 tried to shelter money through Liberty, with other users including top businessmen, QCs, NHS doctors and party donors.