Seven-time Olympic medallist has joined a partnership that will save him thousands in income tax

By Alex Hawkes and Nick Craven Daily Mail

Wiggins signs up with Coronation Street star Bill Roache to avoidance scheme criticised by the Treasury.

Olympic gold medallist and Tour de France winner Bradley Wiggins is slashing his tax bill by using an offshore scheme branded ‘abusive’ and ‘artificial’ by the Treasury.

The Mail on Sunday has learned that the seven-time Olympic medallist, hot favourite for 2012 BBC

Sports Personality of the Year, has joined a partnership that will save him thousands in income tax.

The 32-year-old cycling hero who climbed to the top of his sport partly thanks to Lottery funding, earned an estimated £5 million this year.

He has joined a complex tax-avoidance partnership, Twofold First Services, which takes advantage of farming tax reliefs. But the Treasury has taken action to close the loophole and the taxman last night pledged to ‘investigate and challenge’ any arrangements put in place before the change in the law.

Twofold is controlled by another company, Twofold Partnership  Management, based in the Cayman Islands tax haven. But the firm believed to have set it up, York-based Tax Trade Advisors, is also linked to NT (‘No Tax’) Advisors, the firm criticised for similar schemes involving comedian Jimmy Carr and Coronation Street star Bill Roache.

Roache is also a member of Twofold, along with Wiggins and 230 other rich investors. How much  Wiggins invested is not clear, but his spokesman insisted it involved only a ‘small percentage’ of his income and the ‘vast majority’ of his earnings were taxed at the higher rate of 50 per cent. Sources say the cyclist paid more than £1 million in tax last year.

Companies House records show Wiggins joined Twofold on March 13 this year. On the same day, the Treasury issued a strongly-worded press release referring to an ‘abusive’ tax avoidance scheme’ without naming it. Revenue & Customs (HMRC) said it had shut down a ‘contrived’ scheme being marketed at the time, and that it would challenge any  others put together before March 13.

‘The scheme  .  .  .  used artificial transactions to generate tax relief from a property business that owns agricultural land,’ said the Treasury at the time.

‘Although the land itself and the business owning it will exist, the transactions are not part of any genuine agricultural business. They are generated only to create an artificial loss that can be set off by users  .  .  .  to reduce their tax bill.’

In a Twofold-type scheme, an individual could end up paying no tax at all, by investing around £100,000 yet claiming tax relief on £1 million.

This is achieved as each £100,000 is supplemented by a £900,000 loan taken out by the partnership. That money, after being paid to the farmer, is swiftly repaid to the bank.

The accountants find a way to artificially ‘write down’ the investment to become a loss on paper, even though there was no cash loss.

The original £100,000 goes to the advisers and banks in fees, but the partnership members claim they have made a loss of £1 million, which they set against their income.

Last night an HMRC spokesman, referring to the unnamed March 13 scheme, said: ‘HMRC reacted very quickly when this scheme was disclosed and Ministers announced a change to the legislation within days.

‘This protected the Exchequer by shutting down a scheme that was being marketed at that time. HMRC will challenge any schemes of this type which were implemented before the announcement.’

A spokesman for Wiggins said: ‘The vast majority of Bradley’s income is taxed at the standard and higher rate. The investment in Twofold Services involves only a small percentage of Bradley’s income. Bradley has paid, and will continue to pay, his fair share of tax.’

Roache and NT Advisors declined to comment. Tax Trade Advisors could not be reached for comment.
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