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Melua responds to Liberty tax avoidance scheme involvement

By | Published on Friday 11 July 2014

Katie Melua

Katie Melua has posted a statement following this week’s latest tax avoidance exposé in The Times, as reported on Wednesday, in which she was one of 1600 notable figures linked to a scheme called Liberty, which enabled investors to write off some of their tax payments, but which is now being disputed by HMRC.

Although the celebs haven’t done anything illegal, they will likely now have to repay avoided tax, even though HMRC’s case against the investment programme is yet to reach court, as a result of new rules that enable the Revenue to chase tax payments avoided as a result of avoidance schemes under investigation, even though a tribunal may as yet rule that the scheme was legit.

Melua’s involvement in Liberty was honed in on by various media outlets, because she has previously claimed to proudly pay her way when it comes to taxation, noting that, having been born in Georgia, she has “seen what it is like living in a country where people don’t pay tax and have poor services in terms of health and education”. Christian Aid nominated the singer for its Tax Superhero Award in 2010 on the back of her remarks.

Though, to be fair, while most of the celebrities linked to Liberty, including Gary Barlow, George Michael and The Arctic Monkeys, have so far made no comment, Melua’s legal reps were quick to respond to reporters, claiming that as soon as their client had been told the Inland Revenue was investigating the investment scheme she withdrew from it and repaid taxes that have been avoided by that point. And to that end she wasn’t expecting any demand for new tax payments now the Liberty scheme is heading to tribunal.

In her post on the matter this morning she writes: “I’ve been mentioned recently in the papers, along with many others, within articles concerning a tax avoidance/reduction scheme. At nineteen, I was lucky enough to start making money from my music career, and when I was in my early 20s 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. My focus was, and still is, totally on making music, getting on the road and performing live”.

She goes on: “From what I can remember, in 2008 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. Seemed pretty straight-forward and simple, so I signed up”.

“HMRC did later query it, and I paid the full amount of tax years ago. My tax records are completely up to date and I don’t owe HMRC any money. Yeah, it sucks getting this type of attention, but I commend the investigative journalism that is allowed in Britain. If there is ambiguity in the law then laws should be changed to disallow schemes like this, so that they would never be presented by legitimate tax experts to less experienced people like myself in the first place. Hopefully the debate will lead to positive change for all”.

Of course, it’s easy to knock celebs for not paying their fair share in taxes – “fuck you Barlow with your patronising Children In Need benefit gig, perhaps if you paid your fucking taxes there wouldn’t be any children in need, hey?” – see, I just did it, and it was well easy.

However, that there is an entire industry of accountants and financial advisors who exist to and profit from advising the rich on cutting their tax bills is also a big part of the problem. Plenty of music stars probably don’t really know what they’re doing when they sign a bit of paper their accountant hands them. Which may not be a good excuse, but it is a valid reason for opting into Liberty type schemes.