Former Radio 1 DJ Chris Moyles tried to avoid paying tax of £1 million by posing as a second-hand car dealer in order to claim expenses, a tribunal has found.
Moyles and two other men were found to have taken part in the "working with wheels" deal, which counted "450 fund managers, celebrities and other high earners between 2006 and 2008" as members.
The scheme enabled members to claim that they had incurred large fees by working as second-hand salesmen, which they would then claim back against their own tax bills.
In his self-assessment tax return for the financial year ending on 5 April 2008 the DJ claimed he "had engaged in self-employment as a used car trader". He tried to offset the claimed £1m against tax he owed on his other income, including an estimated £700,000 salary from the BBC.
At the time he was a presenter on BBC Radio One's Breakfast Show.
Moyles paid £95,000 to enter the scheme set up by NT Advisors – whose initials stand for "no tax".
At the tribunal Judge Colin Bishopp described the evidence as "very brief and rather uninformative".
"It is however quite clear from the statement that he too entered the scheme for no purpose other than to achieve a tax saving, and that he took no interest in the trade," the judgement said.
It also detailed that his accountant, Mr Smith, had "agreed that the scale of Moyles's borrowing was driven solely by the amount of the tax loss he wanted to achieve, in his case £1 million, and that the trading was not carried on for its own sake but was merely a means to an end".
While Moyles did not give evidence in person at the tribunal, he did submit a brief witness statement explaining that he was "anxious to be reassured that the scheme was lawful, and that he would not have to undertake any trading himself".
I'm not a tax expert and acted on advice I was given. This was a mistake and I accept the ruling without reservation.— Chris Moyles (@CHRISDJMOYLES) February 21, 2014
I take full responsibility and have learnt a valuable lesson.— Chris Moyles (@CHRISDJMOYLES) February 21, 2014
Exchequer Secretary David Gauke said: "This case is another example of why taxpayers should not fall for the promises of promoters selling schemes that are all too often too good to be true.
"Not only will the taxpayer waste money on the fees for these failed schemes, they will still have to pay all the tax, interest and penalties that are due.
"This Government has provided HMRC with the resources to tackle these avoidance schemes and HMRC will now pursue the other users of the scheme to make sure all the taxes that are due are paid."
Moyles apologised for his participation in the dubious tax avoidance scheme and commented on the ruling on Twitter, stating: "On advice, I signed up to a scheme which I was assured was legal. Despite this, my knowledge of the dealings of the scheme were naive.
"I'm not a tax expert and acted on advice I was given. This was a mistake and I accept the ruling without reservation. I take full responsibility and have learnt a valuable lesson."
Moyles described himself as the "saviour of Radio 1" before he quit as presenter of the breakfast show in 2012.