Celebrities’ £325m tax bill as saving scheme ruled illegal

CELEBRITIES including Gary Barlow and Sir Michael Caine have been told to pay back £325 million in unpaid tax after HMRC won a case ruling that an avoidance scheme they invested in was illegal.

More than 1,600 investors including doctors and judges put £1.2billion into the controversial Liberty scheme from 2005 until 2009.

The “landmark” ruling could lead to investors collectively having to pay back in excess of £325 million from similar schemes.

In 2015 1,600 rich and famous investors in the Liberty scheme were given 90 days to pay back tax they owed for using the offshore plan with HMRC demanding an average of £200,000 each.

At the time lawyers for some of the investors said a number of celebrities could have been bankrupted by the demands. This week the Upper Tribunal appeals court in London ruled that the scheme allowed high earners to create artificial offshore losses which they claimed back in reduced tax bills.

It means that HMRC can hold on to members’ money for good.

The arrangement worked by placing members’ money offshore into a company which created a tax loss for inves- tors, which they could offset against other income.

Among the top investors were the late George Michael, who handed over £6.2million, and Take That singer Barlow, 46, who invested £4.46million. Actor Sir Michael, 81, is said to have tried to shelter £600,000.

Penny Ciniewicz, HMRC’S director general for customer compliance, said: “This is a brilliant victory that will bring in millions of pounds.

“We have repeatedly warned people about the financial consequences of using tax avoidance schemes. More and more people are coming forward and settling what they owe because they know the game is up.”