Why Joe Bloggs couldn't lose ...

A BIZARRE tax scheme in which Joe Bloggs jeans entrepreneur Shami Ahmed sued himself for non-payment of debts has been settled in the High Court. And the winner is - Shami Ahmed.

We revealed how Ahmed was suing himself as part of an elaborate scheme to avoid UK taxes.

Last week, the fashion mogul paid up.

Ahmed's scheme centred on a £1m loan he took out last July from Champion Investments in the Isle of Man at more than 200% a year.

Champion sued Ahmed in November, claiming he had failed to repay part of the loan and owed more than £90,000 in interest.

But sources close to Ahmed told Financial Mail that through offshore trusts, Ahmed was the ultimate beneficiary of Champion.

In effect, Ahmed had borrowed from himself - and by charging huge rates, could offset the costs against tax.

The final piece of the jigsaw was completed last week when a judge granted a special order, known as a Tomlin Order. This is granted when two parties in a legal case agree terms before it comes to court.

But unlike an out-of-court settlement, they take their deal before a judge who, when satisfied that both parties voluntarily accept its terms, grants the order. This stops the case and makes the agreement legally binding. The order can then be submitted to the Inland Revenue as evidence of an expense and be offset against tax.

The order issued on 14 January ordered Ahmed to pay £120,000 to Champion immediately and £55,000 in interest by 4pm last Wednesday. The interest was much reduced from the level first cited, but still represented 48% a year.