Belfast Telegraph

Melua: Tax dodge row sucks... I was financially naive

By Anthony Barnes

Chart star Katie Melua has told how she was "clueless and inexperienced" when she followed the advice of experts to sign up to what turned out to be an aggressive tax avoidance scheme.

The singer, who grew up in Belfast, was among around 1,600 people who were involved with the controversial Liberty tax strategy, but she went on to settle her tax in full with HM Revenue and Customs when it was brought to her attention.

Opening up about the furore for the first time, she admitted it "sucks" that she had been under the spotlight for her part in it, and called for such schemes to be stopped to prevent others from being advised to take part.

Closest Thing To Crazy singer Melua was on a list of figures – including celebrities, doctors and judges – given to The Times after they put around £1.2bn into the scheme from 2005 until 2009. The arrangement created a tax loss for investors which they could offset against other income. Writing on her website yesterday she said: "At 19 I was lucky enough to start making money from my music career, and when I was in my early twenties I trusted financial experts and advisors to guide me with how I invested money.

"That I was fairly clueless and inexperienced when it came to finance goes without saying and, I'm embarrassed to admit, not as interested in it as I should have been."

She added: "From what I can remember when the Liberty scheme was presented to me, it was not presented as 'an aggressive tax avoidance scheme'. It was presented as an 'investment scheme' that had the potential to legally reduce yearly income tax.

"Totally legal and legit and my accountants and advisors would take care to complete the formalities, which included dealing with HMRC."

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Involvement in "aggressive" tax avoidance schemes has 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 fund, but was successfully challenged in court in May.

Liberty faces a similar challenge, scheduled for next year.

Belfast Telegraph


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