Belfast Telegraph

Saturday 27 December 2014

Pop star Katie Melua used tax avoidance scheme, but has 'now paid bill in full'

Singer Katie Melua during graduation at Queen's University last Saturday
Singer Katie Melua during graduation at Queen's University last Saturday
Gary Barlow

Singer Katie Melua has said she paid her taxes in full after learning she was among a number of stars who had invested in a controversial tax avoidance scheme.

Closest Thing To Crazy star Melua – who spent part of her childhood in Belfast – is among more than 1,600 people, including celebrities, doctors and judges, who put money into the Liberty scheme, according to The Times.

Around £1.2 billion is said to have been put into Liberty from 2005 until 2009. The scheme created a tax loss for investors which they could offset against other income, The Times reported.

Georgian-born chart star Melua (29) – who is reported to have put £850,000 into it – went on to settle her tax in full with HM Revenue and Customs when it was brought to her attention.

A spokesman for Melua, who was back in Belfast to pick up an honorary degree from Queen's University on Saturday, said: "At the suggestion of her accountants at the time, Ms Melua participated in the Liberty tax planning venture back in 2008 and declared this to HMRC.

"When HMRC stated they were reviewing the scheme, she paid the tax to HMRC in full. Accordingly, HMRC are not out of pocket and she has not avoided any tax liability."

Melua – who is worth an estimated £12m – was given a 'Tax Superhero Award' by the charity Christian Aid four years ago after she had stated in an interview that she had paid "nearly half of what comes to me in taxes".

The charity said it was disappointed to learn she had participated in the scheme.

Joseph Stead, senior economic justice adviser at Christian Aid, said: "Christian Aid believes it's morally wrong for people to avoid paying their fair share of tax, because it undermines vital public services such as hospitals and schools and forces up taxes on people who are too poor or too honest to use such schemes.

"To be frank, finding celebrities we could use as examples to endorse our tax campaign was an uphill struggle as we have no idea about the tax status of most.

"Katie, however, seemed ideal because of her public pronouncements on the subject," the charity adviser added.

Background

Aggressive tax avoidance schemes have already led to criticism of other stars, including Take That's Gary Barlow. He faces a hefty tax bill for his involvement in another scheme, Icebreaker, which was styled as a music industry investment scheme, but was successfully challenged in court in May. When details of the Icebreaker challenge emerged, David Cameron rejected calls for Barlow to hand back his OBE. But he said "clearly what this scheme was was wrong and it is right that they are going to have to pay back the money".

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