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

Updated: 14 Jan 2020

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.

Vince Cable

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.

Gary Barlow

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.

Jimmy Carr

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’.

David Beckham

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.”

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