The former owner of BHS has been convicted of evading tax on £2.2m of income he received from buying the failed high-street chain.
Instead of paying the tax he knew he owed, Dominic Chappell, 53, spent a fortune on a luxury lifestyle that included a £90,000 yacht, a Bentley Continental car, a Bahamas holiday and some expensive Beretta guns, Southwark Crown Court heard.
The businessman bought BHS for just £1 in 2015, when it was losing £1m a week. It collapsed into administration just over a year later, causing the loss of 11,000 jobs, and with a £500m pensions deficit.
Chappell had denied three charges of cheating the public revenue related to his bankrupt finance company Swiss Rock Limited.
He was charged with dishonestly evading his liability to pay more than £500,000 in VAT, corporation tax and income tax between January 2014 and September 2016.
The businessman, of Blandford Forum, Dorset, was also charged with providing false or misleading information and failing to submit VAT returns. It was alleged he did not arrange for the correct VAT amounts to be registered and he also did not pay VAT.
His lawyers claimed he became - and still is - “utterly broke” because BHS's hugely underfunded “pension problem exploded” within two weeks of buying BHS from retail tycoon Sir Philip Green.
His defence suggested, had BHS not failed, he would have had the funds to pay his tax, but a jury found Chappell guilty of dishonesty after deliberations over three days.
The pensions regulator launched an investigation into the BHS retirement fund.
The trial heard prosecution evidence that he had failed to pay around £350,000 in VAT, £164,000 in corporation tax and about £86,000 in income tax.
The trial heard he was “simply too busy" to sort out his business dealings properly and he was “let down by others”.
With the benefit of hindsight, Chappell told the jury the BHS deal was “a life-changing catastrophe” and he should “never have touched it with a barge pole”.
During his evidence, Chappell repeatedly said he was not an accountant and relied on professional financial experts to deal with the situation as he was “firefighting” the pending collapse of BHS.
Looking back on the BHS deal, he said: “We were given forged and misleading documents by PricewaterhouseCoopers (PwC). I was lied to by Sir Philip Green, as were my board.
“This catastrophe has cost me my marriage, my money and my reputation.”
Chappell told the court he was “lied to” by PwC, who were BHS's auditors.
Chappell denied dodging paying his taxes and whatever was due would be paid as soon as he could reconcile the accounts, which he feared had been drawn up incorrectly.
Defence counsel Trevor Burke QC said Sir Philip, who had run BHS for 15 years, effectively thwarted attempts to rescue the chain by failing to sort out the pension deficit as he promised, to secure finance for suppliers and with a blanket refusal to “entertain” the company being sold on to rival Mike Ashley.
But prosecutor Mark Bryant-Heron QC said Chappell's actions showed that “tax was the last thing he was going to pay” and he “used the money to fund his lifestyle”.
He said: “He had the financial means to pay the tax, and was able to raise funds. He dishonestly chose not to pay tax. In relation to VAT, he did not even make any VAT returns as required to.
“He ignored his duty and legal liability to pay tax, until eventually HMRC had to take enforcement action to wind up the company for non-payment.”
Last year Chappell was banned from running a company for 10 years and in January he was ordered by the pensions regulator to pay £9.5m into BHS's pension schemes.
Additional reporting by PA