Pop stars hit by £20m tax avoidance ruling
Three members of Take That face repaying millions of pounds in tax after a Tribunal ruled that a scheme they invested in was set up for tax avoidance purposes.
Take That stars Gary Barlow, Howard Donald and Mark Owen were three of thousands of investors who used a company called Icebreaker.
Since March 2010 they have been directors of Larkdale LLP, one of 50 partnerships that Icebreaker arranged to take advantage of tax reliefs intended to support those in the music and other creative industries, according to the BBC.
According to The Times, the partnership allowed the musicians to avoid tax on around £63 million from world tours and CD sales and that the band members face a £20 million tax bill following the Tribunal ruling.
The judge ruled that the Icebreaker partnerships had not been set up for commercial purposes or profit.
The paper quoted Judge Colin Bishopp as saying: ‘Icebreaker is, and was known and understood by all concerned to be, a tax avoidance scheme. The aim was to secure relief for members, and to inflate the scale of the relief by unnecessary borrowing.’
According to claims management firm Rebus, in total £336 million was invested through Icebreaker, making the total amount of tax sheltered around £134.5 million. The firm said investors’ losses could be up to £70 million.