Gary Barlow in tax apology

Gary Barlow in tax apologyEver since the current government came to power, the issue of tax avoidance has been a big issue. A number of measures have been introduced, which ministers have declared to have made a significant dent in the pile of unpaid taxes that had been squirrelled away in offshore accounts and various schemes aimed at dodging the Inland Revenue.

With the opposition forever accusing a cabinet dominated by wealthy, public school educated individuals of ‘helping their friends’ in positions of wealth and influence, such issues are particularly sensitive. This has been even more the case amid controversies over the top tax rate and George Osborne’s statement that “we are all in this together”.

However, it is not just in politics that the scrutiny has been intense, as the tax affairs of a number of celebrities have also been under the spotlight – and in many cases have been shown to be anything but squeaky clean. Comedian Jimmy Carr was one of the first cases, followed last year by Take That star Gary Barlow.

In the current political climate, both situations obliged comment from prime minister David Cameron, who slammed Carr but opted to defend Gary Barlow to the extent that he had done a lot of charity work, as well as rejecting suggestions he should be forced to hand back his OBE – a call made by Labour MP and chair of the Public Accounts Committee at Westminster Margaret Hodge.

Speaking publicly about his situation this week, Mr Barlow has issued a public apology via Twitter, which he said he had returned to after a hacking incident had forced him to abandon his account earlier this year.

He said: “I want to apologise to anyone who was offended by the tax stories earlier this year,” with a second Tweet saying: “With a new team of accountants, we are working to settle things with all parties involved ASAP.”

One of those parties, of course, will be the Inland Revenue and Mr Barlow will not be alone, as 1,000 people were involved in the aggressive tax avoidance scheme. This included fellow band members Howard Donald and Mark Owen, plus manager Jonathan Wild. Their cash had been invested into a company called Icebreaker, ostensibly set up to support the music industry but in fact a vehicle linked to 50 partnerships used by the firm to shift money away from the taxman.

In this case, the quartet were given director status at Larkdale LLP, which despite having £25 million sunk into it reported annual losses, which could be offset against tax.

With a tribunal judge ruling that Icebreaker was a tax avoidance vehicle instead of what it was purported to be, the band members have been left with big bills and egg on their faces.

Looking at the band’s list of past hits, clearly the ruling was anything but the “Greatest Day” for them, but after a bit of “Patience” the Inland Revenue may feel rather differently. To get the lost tax money “Back For Good” will be good news for the public purse, as well as serving as a reminder that in an age of cuts, austerity and efforts to fix the public finances, tax avoidance efforts may now be more likely to backfire than they used to be.

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