HMRC’s crackdown on marketed tax avoidance schemes only appears to be gaining pace, with news this week that another big scheme, named Liberty, is under investigation by the taxman.
The scheme is estimated to be worth around £1.2 billion, and was used by roughly 1,600 people in the UK including film star Michael Caine, musicians Katie Melua, George Michael, The Arctic Monkeys, and Take That star Gary Barlow.
Barlow’s involvement in the offshore avoidance scheme will further tarnish the reputation of the once-venerated pop star. It was revealed earlier this year that Barlow and his fellow Take That bandmates had invested £66 million in the controversial “Icebreaker Partnerships” scheme that was ruled illegal by a tax tribunal. Barlow is thought to have invested almost £4.5 million in the Liberty scheme.
Every individual who invested in the scheme will receive an accelerated payment notice from HMRC this month demanding they repay avoided tax.
The Liberty scheme avoided tax in a similar way to the Icebreaker Partnerships – by recording artificial losses that could be offset against tax. The main difference between the two schemes is that Liberty moved these losses offshore.
An HMRC spokesperson told The Mirror newspaper:
“If they do not pay we will take legal action.
“If they don’t come to an agreement with us, we can seize their assets. We have the power to do that without going through the courts.”
However, as The Times reported this morning, if Liberty is ruled illegal at tribunal next March HMRC will miss out on collecting owed tax from at least 26 members of the scheme, as it failed to challenge their tax returns within the legal time limit.
The news follows a tumultuous few months for celebrity tax avoiders. Just this week the Guardian published details of celebrity offshore holdings in Jersey, including actor Mel Gibson and Spanish tenor Placido Domingo, while in April the BBC investigated Formula 1 mogul Bernie Ecclestone’s purported tax avoidance.
Photo by Waqas Mustafeez