UK newspaper The Times has revealed that the five-time Olympic gold medal winner was an investor in The Cup Trust.
The charity was closed down by the Charity Commission in 2017 after the newspaper exposed how it was used by wealthy donors to avoid paying tens of millions of pounds in tax.
It would reportedly have resulted in tax savings of £55m for investors had it succeeded.
The Cup Trust also attempted to claim £46m in gift aid against the value of the donations from HM Revenue & Customs. This was, however, rejected by the tax authorities.
The latest blow comes as Wiggins fights off allegations that he used performance enhancing drugs.
Disgusting
The UK’s Charity Commission opened an inquiry into The Cup Trust in April 2013 to investigate its governance by trustees, the management of conflicts of interest and the charity’s involvement in the gift aid scheme.
Gift aid enables registered charities to reclaim tax on donations made by UK taxpayers, effectively increasing the amount donated.
According to The Times, The Cup Trust reported donations of £176m in 2010 but only gave £150,000 to good causes.
Instead, it carried out trades to artificially generate gift aid claims that could be used by donors to reduce their tax bills.
Margaret Hodge, former chairwoman of the Commons public accounts committee, described it as the most shocking of all tax avoidance schemes.
“To exploit a mechanism designed to encourage charitable giving in order to avoid tax is just disgusting,” she said.
The Times reported that there is no suggestion that the arrangement was illegal.
Settled with HMRC
Wiggins is the first investor to have been identified but he is believed to be among 400 people who invested in the scheme.
It is not known how much he invested.
A spokesperson told The Times that Wiggins “settled all tax liabilities a number of years ago and has paid all taxes due”.
He added that there were “no open inquiries with HMRC”.
