News Summary
- 1979 F1 world champion Jody Scheckter has lost a UK tax appeal involving around £1.4 million in disputed tax relief
- The case concerned losses generated by Laverstoke Park Produce, the organic farming business Scheckter developed after his racing career
- The tribunal accepted that Scheckter genuinely intended to make the wider business profitable but ruled that the conditions for the disputed relief had not been met
Former Formula 1 world champion Jody Scheckter has lost a legal battle with Britain’s tax authority over approximately £1.4 million in tax relief claimed against losses generated by his organic farming business.
The South African, who won the 1979 F1 title with Ferrari, appealed against HM Revenue and Customs’ decision to disallow claims for sideways loss relief relating to Laverstoke Park Produce LLP.
The case, Scheckter v Revenue and Customs, was decided by the UK’s First-tier Tribunal and handed down on September 3. Scheckter’s appeal was dismissed.
The dispute concerned losses from the 2007/08, 2008/09 and 2009/10 tax years. Laverstoke Park Produce LLP, incorporated in 2001 with Scheckter as its principal member, was involved in activities including livestock, crops, dairy processing and the sale of produce.
The LLP recorded substantial losses in every accounting period between 2002 and 2018.
Scheckter had sought to offset qualifying losses from the business against other taxable income and, in one year, capital gains. HMRC rejected the claims, eventually leading to the tribunal proceedings.
Why did Jody Scheckter lose the tax case?
At the centre of the dispute was whether the farming operation met the statutory requirements that would allow Scheckter to claim the relief.
The tribunal considered several issues, including whether the LLP was operating a farming trade, whether that activity formed part of a larger commercial undertaking with a connected company and whether the business was being conducted on a commercial basis with a view to making profits.
Scheckter succeeded on some of those arguments.
The tribunal accepted that the LLP and the connected company could form part of a larger trading undertaking and also found that the operation was carried on with a genuine view to eventually making a profit.
However, that was not enough to secure the relief.
The judges found that the farming operation was not merely ancillary to the larger business, which prevented Scheckter from relying on an exception to restrictions applying to long-running farming losses.
The tribunal also concluded that the LLP had not been operated on a commercial basis during the relevant periods. One significant issue was that the LLP owned the Laverstoke brand — regarded as its most valuable asset — but allowed the connected company to use it without receiving payment.
Those findings meant Scheckter’s appeal over the loss relief failed.
Scheckter invested heavily after leaving Formula 1
The farming project became one of Scheckter’s major pursuits after his F1 career.
He acquired farmland at Laverstoke Park in Hampshire after moving to England in 1996, with the farming operation beginning commercially in the following years. What initially developed from his interest in producing high-quality organic food eventually grew into a much larger enterprise.
Scheckter invested heavily in the project, which included livestock, dairy production, an abattoir, farm shop, composting facilities and other agricultural operations.
During the proceedings, the former Ferrari driver acknowledged mistakes in how quickly the operation had expanded and the scale of his investment.
The tribunal nevertheless accepted that making money was genuinely among Scheckter’s objectives, alongside his broader ambition of promoting organic farming and healthier food.
Judges Tony Beare and Jane Shillaker expressed regret over how the project had developed, acknowledging the considerable financial investment and personal energy Scheckter had devoted to it.
The farming business ultimately ceased its dairy and buffalo operations in 2024.
Scheckter won Ferrari’s 1979 F1 world championship
Scheckter remains one of the most significant figures in Ferrari’s Formula 1 history.
After racing for McLaren, Tyrrell and Wolf, the South African joined Ferrari and won the 1979 Drivers’ Championship alongside team-mate Gilles Villeneuve.
Scheckter won three Grands Prix that season and secured the championship at Monza, with Villeneuve finishing second in the standings.
It proved particularly significant for Ferrari. No driver would win another world championship for the Scuderia until Michael Schumacher ended the 21-year wait in 2000.
Scheckter retired from Formula 1 at the end of the following season, aged 30. He finished his career with 10 Grand Prix victories and remains the only African driver to have won the F1 World Championship.
His post-racing business career initially brought considerable success before he turned his attention to the Laverstoke farming project that eventually became the subject of the lengthy dispute with HMRC.
FAQ
How much was Jody Scheckter’s tax case worth?
The dispute involved approximately £1.4 million in tax relief linked to losses generated by Laverstoke Park Produce. The First-tier Tribunal dismissed Scheckter’s appeal against HMRC’s decision to deny the relief.
When did Jody Scheckter win the F1 championship?
Jody Scheckter won the Formula 1 World Drivers’ Championship with Ferrari in 1979. He won three races that season and beat team-mate Gilles Villeneuve to the title.
What happened to Jody Scheckter’s farm?
Scheckter developed Laverstoke Park into a major organic farming operation in Hampshire after moving to England. The business endured years of losses, and its dairy and buffalo farming operations ceased in 2024.
