Formula One world champion Lewis Hamilton reportedly avoided tax on his PS16.5million ($A32.3 million) private jet.

The BBC reports Paradise Papers documents show a PS3.3million VAT refund was given after the aircraft was imported into the Isle of Man in 2013.

It is alleged Hamilton’s accountants and lawyers helped him – and others – set up companies through which they rented their own jets from themselves.

A spokesman for the Mercedes driver said on Monday evening everything was “above board”.

Any private jet purchased outside the European Union is subject to 20 per cent VAT.

Under UK and EU legislation, Hamilton would have been entitled to a VAT rebate if the jet was to be used purely for business.

However the BBC’s Panorama has seen documents suggesting the 32-year-old intended making private flights about a third of the time.

Hamilton’s pictures on social media appear to back up those claims, with photographs showing him using the plane to travel on holiday.

According to the BBC, Hamilton’s lawyers said there had been no illegal activity but admitted no VAT had been paid on the plane.

“If private usage of the jet is being disguised as business usage of the jet, then what you essentially have is a tax avoidance scheme,” Rita De La Feria, professor of tax law at Leeds University, told the BBC.

“You’re using it for your own private interests, you’re going on holidays, meeting friends. You’re supposed to pay the tax on private consumption.”

A spokesman for Hamilton said as a global sportsman who pays tax in many countries, he relied on professional advisers to manage his affairs.

“Those advisers have assured Lewis everything is above board and the matter is now in the hands of his lawyers.”