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Matalan founder Hargeaves loses 20-year court battle over tax bill

Matalan founder John Hargreaves has lost a long-running court battle over a multimillion-pound tax bill. The businessman, who is based in Monaco, has been ordered to… View Article

FASHION

Matalan founder Hargeaves loses 20-year court battle over tax bill

Matalan founder John Hargreaves has lost a long-running court battle over a multimillion-pound tax bill.

The businessman, who is based in Monaco, has been ordered to pay capital gains tax on his sale of £231m of Matalan shares in May 2000.

The founder of Matalan has lost a court battle with HMRC over an attempt to dodge a tax bill of up to £135m.

John Hargreaves has been ordered to pay after The Upper Tier Tribunal – the highest court that oversees tax cases – ruled he owed capital gains tax in relation to his £231m sale of shares in the Merseyside-headquartered retailer in 2000.

The retail boss has been in dispute with officials over his tax status for nearly 20 years.

Mr Hargreaves established the brand as a shop in Preston in 1985 before he moved to Monaco two years after floating it on the London Stock Exchange in 1998.

The company was taken private again by the Hargreaves family in October 2006.

Two months after Mr Hargreaves relocated to tax-haven Monaco, court papers state that part of his motive for moving was to ensure ‘he was no longer resident in the UK for tax purposes’.

However, Mr Hargreaves continued to spend time in the UK and HMRC concluded in 2007 that he owed £84m in extra tax for the year 2000-01 after spending 152 days in the UK during that time.

The court ruling said: “Part of Mr Hargreaves’ object in moving to Monaco was to ensure that he was no longer resident in the UK for tax purposes so that he could dispose of shares without becoming liable to capital gains tax.”

The Upper Tier Tribunal ruled against Mr Hargreaves’ latest appeal on February 11.

He has three weeks to take the case to the Court of Appeal.

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