Singer Katie Melua today backed tougher laws on tax avoidance schemes as she told how it “sucks” being at the centre of a storm over celebrities’ finances.
Speaking for the first time after being named among a string of stars in an alleged tax avoidance row, she admitted putting money into a controversial scheme called Liberty when in her early 20s.
The revelation earlier this week sparked a wave of criticism.
She was branded a “fallen hero” by Christian Aid which had nominated her for their Tax Superhero Award four years ago after she publicly said she paid “nearly half of what comes to me in taxes”.
In a personal statement today, she stressed that when she invested in Liberty in 2008, she was “fairly clueless and inexperienced” about her finances, trusting financial experts and advisors to guide her.
The Closest Thing To Crazy star 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. Seemed pretty straight-forward and simple, so I signed up.”
Revenue & Customs has reportedly been investigating Liberty, a legal scheme, for more than a decade and a tribunal hearing is due to take place next year.
Georgian-born chart star Melua, now 29, declared her investment to HMRC and when it queried the scheme, she “paid the full amount of tax years ago”.
But the furore over her tax affairs has clearly been a blow.
“Yeah it sucks getting this type of attention,” she added.
“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.”
Melua was among more 1,600 people, including celebrities such as George Michael and Gary Barlow, doctors and judges, who allegedly put money into the Liberty scheme, according to The Times.
Around £1.2 billion is said to have been invested from 2005 until 2009.
Some people who put money in may not have claimed tax relief through it so would not have avoided tax, or may have been unaware of how it reduced people’s tax bills.
HMRC has stressed it is “always happy to help the increasing numbers who want to disentangle themselves from the increasingly fruitless practice of tax avoidance”.
