Insider blows the whistle on multi-million pound tax avoidance ‘factory’

Failed tax avoidance business Welbeck hired young actors to push schemes onto City big earners, and reaped millions in commissions that fuelled lifestyles of fast cars and exotic holidays, according to a whistleblower who worked at the firm.

Welbeck Solutions sold pensions and financial products, but it specialised in tax avoidance schemes such as Icebreaker and Liberty, which have since been banned by HMRC and tax tribunals.

Celebrities including Take That’s Gary Barlow and Mark Owen used the schemes, and have in some cases have been forced to repay hundreds of thousands of pounds.

But Welbeck’s biggest targets were City investment bankers, according to a whistleblower who spoke to the Independent newspaper.

The Financial Services Compensation Scheme (FSCS) has agreed to deal with tax avoidance cases where there is an underlying investment, creating what some have branded a tax avoidance advice ‘timebomb’ built up over a decade.

Sky-High Commissions
Welbeck helped clients shelter nearly £80m from the taxman in the Icebreaker scheme, according to the Independent.

The aggressive structure of the products meant investors could shelter £200,000 of their income tax by spending as little as £40,000. In return, Welbeck would take a fee of as much as £3,000. For £1m sheltered, Welbeck would get around £30,000, the report said.

According to the Independent, Welbeck sent marketing emails that said: “We have a scheme available that will reduce your income tax from 40% to 0% with 6% fees and can also attack the income you have earn’t [sic] over the last four years.”

Advisers recommending tax avoidance products do not have to be regulated by the Financial Conduct Authority.

Million Cold Calls A Year
The Welbeck whistleblower, who worked at the company for many years, told the Independent: “At our peak in 2012, we had about 80 staff making a million cold calls in a year. We were like a giant tax avoidance factory. It got so bad you didn’t want to admit you worked for Welbeck in City pubs or people would start abusing you for all the cold calls.”

The salespeople who made the cold calls that brought in the cash – some of whom were young drama students – were rewarded with exotic holidays by Wellbeck bosses Greg Knight, Gregor Shaw and Charlie Charalambous, according to the Independent.

The bosses themselves enjoyed the high life on the commissions from Wellbeck’s tax avoidance schemes, on luxury cars and restaurants.

Welbeck eventually collapsed into administration last year. Knight was made personally bankrupt over the summer.

But Wellbeck’s salesmen are still selling “tax planning” products elsewhere. Shaw now operates a financial advisory business called Argentous, which sells products including green energy schemes which benefit from generous tax incentives, according to the Independent.

Knight, Shaw and Charalambous declined to repsond to the whistleblower’s account, according to the paper.