UK’s most feared divorce lawyer beats tax authorities over £ 500,000
He is one of Britain’s most feared divorce lawyers. He reveled in the nickname “Jaws” and won multi-million pound settlements for celebrities such as Sadie Frost and Irina Abramovich.
Now 81-year-old Raymond Tooth triumphed in court again – this time against HM Revenue & Customs for a £ 500,000 tax bill. Tooth successfully argued that he shouldn’t have to pay the tax owed for participating in the Romangate tax evasion scheme – which was used by 500 people, including comedian Jimmy Carr – because the tax authorities had took too long to investigate his affairs.
Following a Supreme Court verdict last Friday, Tooth was unrepentant, saying the project was sold to him as legitimate at the time. “I can see people might be saying these days, ‘Oh, he’s absolutely wrong to go into a tax evasion scheme.’ But they weren’t sold as tax evasion schemes at the time, they were sold as tax savings schemes, ”he said. “I understood it correctly, that it was a tax saving scheme and that there was nothing illegal about it.
“It’s a bit like being accused of a lot of things, in retrospect. The world has changed – and with good reason. But you cannot remove the history of the case. “
Following a change in the law in 2007, anyone using a tax evasion scheme was required to report it to HMRC. Tooth listed the Romangate diet in his 2007-08 tax return. The system was sold by developer NT Advisors, who was then beaten ten times in court by HMRC, forcing the refund of £ 916 million in tax.
When reporting his involvement, Tooth’s advisor had put the money held in the plan in the wrong box on a form due to a defect in the HMRC-approved software. The IRS said his staff noticed the problem, but did not in fact send Tooth a formal notice to investigate – and an invoice for £ 475,498.37 – until October 2014, this which was well outside the legal deadline of four years for the opening of investigations. In a succession of courts, HMRC has argued that he should have been allowed up to 20 years because he had committed a “deliberate” action by putting the details of the scheme in the wrong box. However, last week Lord Briggs and Lord Sales of the Supreme Court disagreed and concluded that HMRC was simply running out of time.
Tooth is known as a winner in the fierce divorce settlement industry, emerging victorious from his 40-year career on behalf of an array of wealthy and angry clients seeking payouts from their multi-millionaire partners.
These range from Irina Abramovich, wife of Chelsea football club owner Roman Abramovich, for whom he earned £ 155million, and actor Jude Law’s ex-wife Sadie Frost ( £ 4million plus a £ 2million house and £ 150,000 a year under maintenance). Other clients included Cheryl Barrymore, who received £ 3.5million from her husband, TV presenter, Michael, and Eimear Montgomerie, wife of golfer Colin Montgomerie, who got £ 15million.
Besides the prominence of the tax case, experts said Tooth’s victory over HMRC had serious consequences for the taxman. “It could lead to hundreds of investigations being void because HMRC was too late when it launched them,” said Heather Self, partner at Blick Rothenberg accountants.
A spokesperson for HMRC said: “HMRC will continue to review whether inaccuracies in returns are reckless or deliberate on a case-by-case basis.”