Has Hamilton's private jet landed him in tax trouble?

Lewis Hamilton has came under scrutiny after a leak of documents known as the Paradise Papers revealed his company accepted a VAT refund pertaining to business use of his private jet. But what does it mean for the world champion?

What are the Paradise Papers?

The Paradise Papers is a special investigation involving the Guardian, the BBC and over 90 other media publications across the world, into 13.4m leaked files from two offshore service providers and 19 tax havens' company registries.

Contained within the papers are secrets of how the wealthy hide their money through tax efficient schemes. A host of established figures, from the Queen to Gary Lineker, have been implicated.

What do the Papers say about Lewis Hamilton's tax affairs?

Formula 1 champion Lewis Hamilton is alleged to have avoided paying tax on his private jet, believed to be worth £16.5m.

The Papers show a £3.3m VAT refund was provided after his plane, the Bombardier Challenger 605, was imported into the Isle of Man in 2013.

Advisers to Hamilton were able to establish a leasing deal which did not comply with an EU & UK ban on refunds for private use, though it is unclear if he could have been entitled to one for business reasons.

Hamilton's lawyers have stated that a tax barrister review found the system to be within the law.

What has Hamilton allegedly done wrong?

The exemption applies to business use, but the Papers indicate that the 32-year-old intended to make private flights a third of the time.

His social media footprint shows holidays and other such trips taken in the jet. If private usage is being disguised as business usage, that could represent a tax avoidance scheme, because tax is entitled to be paid on private consumption.

Private jets bought outside the EU are subject to 20% VAT import tax. Hamilton's advisers formed a VAT-registered leasing business on the Isle of Man. This new company leased the jet from Hamilton's company registered in the British Virgin Islands and imported it to the Isle of Man.

On a monthly basis, Hamilton's advisers suggested that he would spend 80 hours on the plane per month, with his company using it for 160 hours. If this scenario were true, then only 2/3 of the VAT accrued should have been refunded - if at all.

There are thought to be 50 other schemes in the Paradise Papers identical to Hamilton's.

What was Hamilton's response?