The Tax Files: The UK’s Biggest Tax Dodgers
In March 2019, Lorraine Kelly won a £1.2 million tax case against HMRC. This was after they had sent her a bill of £900,000 in Income Tax and more than £300,000 in National Insurance contributions. Kelly…
10 Minute Read
In March 2019, Lorraine Kelly won a £1.2 million tax case against HMRC. This was after they had sent her a bill of £900,000 in Income Tax and more than £300,000 in National Insurance contributions.
Kelly argued that she was a performer and narrowly won on the basis that the judge recognised her as a ‘freelancer’. It was determined her relationship with ITV was not that of employer and employee.
However, other celebrities and famous figures haven’t been so lucky. From politicians to footballers, we’ve compiled our list of the UK’s top tax dodgers here, together with the considerations you can make to ensure you’re always compliant.
Although he’s perhaps not the largest tax avoider, considering Vince Cable’s recent success in local elections and ardent stance on wealth tax, his run-in with HMRC is an important lesson for all taxpayers.
In 2011, the former Business Secretary failed to inform HMRC that his income exceeded the VAT threshold. A book deal and regular media appearances had taken his business earnings from £65,738 to approximately £192,000.
If your turnover exceeds the VAT registration threshold (£85,000 as of 2019/20), then you must register within 30 days. While Cable did admit his mistake and was let off with a penalty of £500, it provided somewhat of a PR nightmare – a mistake avoidable with the right foresight.
While Mark Owen and Howard Donald also took part, Gary Barlow was at the forefront of a scandal in 2014 after investing in two partnerships styled as music industry investment schemes.
The scheme was known as ‘Icebreaker Management’ and it allowed the artist to avoid a significant portion of his tax responsibility. The volume of complaints against Barlow led to genuine calls to have him stripped of his OBE.
As a consequence of this mistake, Barlow and his fellow band members were ordered by HMRC to pay £20 million in June 2016. While he has since apologised, the media’s portrayal of Britain’s most agreeable frontman left scars on his persona.
Speaking of media personalities losing credibility, Jimmy Carr was also heavily criticised in the press for his involvement in an offshore wealth management scheme in 2012.
The comedian’s involvement had meant that, of the £3.3 million he was sheltering in the organisation, he was only paying 1% tax. This caught the ire of Prime Minister David Cameron, who called Carr’s behaviour “morally wrong”.
While this form of tax avoidance is legal, the revelation of it caused a huge hit on Carr’s popularity and led to a tense episode of the television show ‘8 Out of 10 Cats’.
Superstar footballer David Beckham may not have been the only individual to be penalised by having to pay his share of a £700 million tax bill in this particular case, but he was certainly one of the biggest names attached. Beckham, along with Ant & Dec and Gary Lineker, invested in finance firm ‘Ingenious’ who had supported movies including Avatar and Life of Pi.
Celebrities were enticed into investing a minimum of £100,000 to stimulate British film, and were offered tax breaks in return. However, tax tribunal judge Charles Hellier ruled that the schemes were not legitimate investment opportunities and upheld the decision to force the celebrities to pay the fine – including interest.
What’s most significant here is that these individuals allowed ‘experts’ to control their wealth in a manner that wasn’t transparent. Once the public discovered the shady nature of the management, it was the individuals that were shamed the most – not those that were influencing them.
Stay on the right side of HMRC
It pays to understand your tax contribution. As Gary Barlow said in his autobiography: “I knew what the investments were designed to do and I simply didn’t ask enough questions about them.”
With GoSimpleTax, you have a complete overview of your tax liabilities. You’ll (legitimately) never have to worry about oversight again.
Our Self Assessment tax return software is designed to streamline the submission process and give you clarity on your liability. Find out more about our software or contact our team and let GoSimpleTax protect you against poor tax practice today.
Trusted by over 10,000 subscribers
You don't need to be an expert to complete your self assessment tax return.
Managing your finances has never been so easy.
Start you self assessment tax return today for free.Get Started
How and When Should You Report a SEISS Grant on Your Tax Return?
24 Mar 2021
Jeanette Kenny Explains How GoSimpleTax’s Tax Return Review Service Helped Saved Her Money
22 Mar 2021
April 2021: The Latest Tax Changes For The Self-Employed
12 Mar 2021
How GoSimpleTax Works
Simply register for free with your full name and email address.
Select Your Income
Select the income you receive and follow the hints and tips for potential tax savings.
Validate Your Information
Validate your personal information and submit directly to HMRC to get confirmation in just seconds.
Work Anywhere, With Any Device
Gone are the days of fretting over a calculator surrounded by scraps of paper at the eleventh hour.
GoSimpleTax’s tax return software uses the information you upload in real time to calculate your income and expenditure, working out the tax you owe and sending you helpful notifications when there’s the possibility of a mistake.
"The software is intuitive and proved very easy to navigate. I found the whole process refreshingly simple. I saved a lot of money too!"
"Easy to use and value for money. Everything you need to do your tax."
"It fills in all the forms and sends them to the Inland Revenue. Not expensive either. Takes the stress out of doing your tax return online."