Prose

We bring to your attention the excerpts from Richard Branson’s autobiography “Losing My Virginity.” Excerpts indicate that the world-famous corporation Virgin Group would have not existed today,  if its  its founder Richard Branson had been arrested for tax evasion in the early beginning of his career …

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Richard Branson “Losing My Virginity”¹

Chapter 5. Learning a lesson

Throughout the spring of 1971, Virgin Mail Order attracted many more customers. But, although the company was growing, we were losing money. We offered large discounts on all records and, by the time we had spent money on the telephone calls to order them, paid for the postage, and accounted for the staff and the shops, we weren’t keeping up.

Sometimes our customers pretended that they hadn’t received the records so we would have to send out a second copy, and often a third and a
fourth and so on.

All in all we were gradually losing money, and before long we were 15,000 pounds overdrawn.

In the spring I received an order from Belgium for a large number of records. I went to the record companies that published those records and bought them without paying the purchase tax which we had to pay on records sold in the UK. I then borrowed a van and drove down to Dover to take the ferry across to France and then drive on to Belgium. Some papers were stamped at Dover to confirm that so many records had been exported, but when I arrived at Calais I was asked for another document, a carnet which proved I wasn’t going to sell them en route in France. The British and the French authorities both charged purchase tax on records, while Belgium charged nothing, so the records in my van were effectively bonded stock. I did not have this carnet, and to my disappointment was forced to go back to Dover on the ferry, with the records still in my van.

However, as I drove back to London, it dawned on me that I was now carrying a van load of records that had apparently been exported. I even had the customs stamp to prove it. The fact that the French customs had not allowed me through France was unknown. I had paid no purchase tax on these records, so I could sell them either by mail order or at the Virgin shop and make about 5,000 more profit than I could have done by the legal route. Two or three more trips like this and we would be out of debt.

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It was acriminal plan, and I was breaking the law. But I had always got away with breaking rules before. In those days I felt that I could do no wrong and that, even if I did, I wouldn’t be caught.

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The next morning I was due to make what I hoped would be my final trip down to Dover, pretending to export records. By this time I had made
three trips and 12,000 profit. This last trip would provide enough money to pay off our overdraft. I could then give up the scam and concentrate on the business. It is impossible to know whether we really would have stopped since making such easy money is addictive, but that was our intention. That morning I loaded up the van with records once again and set off for Dover. This time I was even more casual than normal and after my papers were stamped I didn’t even bother going on the ferry but simply drove around the dock and headed back for London.<…>

The telephone rang at around midnight. The caller refused to give his name, but what he had to say was terrifying. He warned me that my bogus trips to the Continent had been noticed and that I was about to be raided by the Customs and Excise office. He said that, if I bought an ultraviolet sun lamp from a chemist’s shop and shone it on the records that I had bought from EMI, I would notice a fluorescent “E’ stamped on the vinyl of all the ones that were meant to have been exported to Belgium. He told me that I would be raided first thing tomorrow morning. When I thanked him, he told me he was helping me because I had once stayed up late talking to a suicidal friend of his who had called the Student Advisory Centre. I suspected that he was a customs officer.

I called Nik and Tony and rushed out to buy two sun lamps from a late-night chemist on Westbourne Grove.

We met at South Wharf Road and started pulling records out of their sleeves. The ghastly truth was revealed: an “E’ shone up at us from all the records we had bought from EMI for export. We began to run in and out of the warehouse carrying piles of records into the van. We then made a terrible mistake: we assumed that the Customs and Excise officers would just raid the South Wharf warehouse. We therefore drove all the records round to the Oxford Street shop and put them in the racks to be sold. We had no idea that Customs and Excise officers have greater powers of immediate search than the police. I had a similar attitude to when the Church Commissioners used to come to Albion Street: it was all some great game and I found it difficult to take very seriously. By the early hours of the morning we had taken all the “E’-stamped records to the Oxford Street shop, and substituted some bona fide records for the warehouse stock.

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At the South Wharf Road warehouse, we unlocked the doors and walked upstairs. But before we could reach my office there was a knock on the door. I opened it to find seven or eight men in brown macs.

“Are you Richard Branson?” they said.

“We’re Customs and Excise and we’ve got a warrant to inspect your
stock.”

These men were rather different from the two dowdy little accountants I had been expecting. They were bulky, tough men, and very threatening. Some of my cock sureness evaporated as I showed them into the warehouse.

“You’re meant to have gone to Belgium yesterday,” one of them said.

“You can’t get back this quickly.”

I tried to laugh this off as I watched them begin to check all the records with their ultraviolet lamp. They grew increasingly worried when they couldn’t find any marked records. I enjoyed their confusion, trying to conceal my hope that we would get away with it. We began helping to check all the records, handing them the records from the sleeves and restocking them on the shelves.

What I didn’t realise until it was too late was that they were simultaneously busting our shops in Oxford Street and Liverpool, and finding hundreds of marked records.

“All right.” One of the officers put down the 99 telephone.

“They’ve found them. You’d better come with me. I’m arresting you. Come down to Dover with us and make a statement.”

I couldn’t believe it. I had always thought that only criminals werearrested: it hadn’t occurred to me that I had become one. I had been stealing money from Customs and Excise. It wasn’t some great game about my getting one up on the Customs and Excise office and getting off scot-free: I was guilty.

At Dover I was charged under Section 301 of the Customs and Excise Act 1952: “That on 28 May 1971 at Eastern Docks, Dover, you caused to be delivered to an officer a ship’s manifest, being a document produced for the purpose of an assigned matter namely Customs, which was untrue in a material particular in that it purported to show the exportation of 10,000 gramophone records .. .”

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Over the summer I confronted the problem with far less shame than I would have done if my parents had added to the burden. I kept a clear head; I was sorry; I wouldn’t do it again; and I negotiated an out-of-court settlement with the Customs and Excise office. The tax authorities in the UK are more interested in extracting money than going through expensive court cases.

On 18 August 1971 I agreed to pay 15,000 pounds as an immediate payment, with 45,000 pounds to be paid in three instalments over the next three years. The total was calculated as being three times the illegal profit which Virgin had made from avoiding the purchase tax. If I paid off the sums agreed, I would avoid a criminal record. But, if I failed to pay it, I would be rearrested and tried.

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¹ Source: Branson, Richard. “Losing My Virginity”/ The Autobiography. – London: Virgin Books LTD, 1998. – Free download is available at: http://alfalib.com/book/read/id/111825

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