Chris Moyles, the former BBC Radio 1 host and TV presenter, claimed to be a used car salesman in a failed attempt to avoid up to £1m in tax.
Moyles attempted to use a tax avoidance scheme called Working Wheels, which involved him telling HM Revenue & Customs he had spent a year "engaged in self-employment as a used car trader", a tax tribunal judge said.
Moyles, who billed himself as the "saviour of Radio 1" before he quit as presenter of the breakfast show in 2012, claimed to have run up £1m of losses selling £3,731 worth of used cars. He tried to offset the claimed £1m loss in the 2007-08 financial year against tax he owed on his other income, including an estimated £700,000 salary from the BBC, which is funded by licence fee payers.
The tribunal judge, Colin Bishopp, said Moyles was trying to use the scheme to make it look like he had incurred vast fees "as though by magic".
Bishopp said it was "quite clear that he [Moyles] entered the scheme for no purpose other than to achieve a tax saving".
The former DJ's accountant, Derek Smith, admitted to the tribunal that "the scale of Moyles' borrowing was driven solely by the amount of the tax loss he wanted to achieve, in his case £1m, and that the trading was not carried on for its own sake but was merely a means to an end".
Moyles apologised on Friday night for entering into the scheme. He said on Twitter he took "full responsibility" and had "learnt a valuable lesson".
He said: "Upon advice, I signed up to a scheme which I was assured was legal. Despite this, my knowledge of the dealings of the scheme were naive. I'm not a tax expert and acted on advice I was given. This was a mistake and I accept the ruling without reservation."
Moyles paid £95,000 to enter the Working Wheels scheme set up NT Advisors – whose initials stand for "no tax". Moyles was one of three individuals using the scheme selected to be test cases in the tribunal by HMRC.
The scheme was used by several other celebrities, 450 City fund managers and other high earners.
"None of the appellants took any interest whatever in the details of the purchases and sales; they were indifferent to whether a profit or loss was made," Bishopp said in his ruling. "From their perspective, this was not a trade but a means of securing tax relief."
It is the fourth consecutive tax ruling against NT Advisors, which also set up the Cup Trust, a charity tax scheme which donated just £55,000 of its £176m income.
David Gauke, the exchequer secretary, said: "This case is another example of why taxpayers should not fall for the promises of promoters selling schemes that are all too often too good to be true. Not only will the taxpayer waste money on the fees for these failed schemes, they will still have to pay all the tax, interest and penalties that are due.
"This government has provided HMRC with the resources to tackle these avoidance schemes and HMRC will now pursue the other users of the scheme to make sure all the taxes that are due are paid."