Katie Melua 'clueless' over tax scheme

Katie Melua 'clueless' over tax scheme

Singer Katie Melua said she was "clueless and inexperienced" when she followed the advice of experts to sign up to what turned out to be an aggressive tax avoidance scheme.

The Closest Thing To Crazy singer was among around 1,600 people who were involved with the controversial Liberty tax strategy, but she went on to settle her tax in full with HM Revenue and Customs when it was brought to her attention.

The Georgian-born star was on a list of figures - including celebrities, doctors and judges - given to The Times after they put around £1.2 billion into the scheme from 2005 until 2009. The arrangement created a tax loss for investors which they could offset against other income.

Other celebrities have not responded to the claims that they were involved, but Melua was upfront and told how she pulled out as soon as she was made aware of the nature of the scheme and then paid her full tax liability.

Writing about the issue on her website, she explained: "At 19 I was lucky enough to start making money from my music career, and when I was in my early twenties I trusted financial experts and advisors to guide me with how I invested money.

"That I was fairly clueless and inexperienced when it came to finance goes without saying and, I'm embarrassed to admit, I was not as interested in it as I should have been. My focus was, and still is, totally on making music, getting on the road and performing live.

(It) seemed pretty straight-forward and simple, so I signed up.

Katie Melua

"From what I can remember in 2008 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."

She went on: "HMRC did later query it, and I paid the full amount of tax years ago. My tax records are completely up to date and I don't owe HMRC any money.

"Yeah it sucks getting this type of attention, but I commend the investigative journalism that is allowed in Britain. 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. Hopefully the debate will lead to positive change for all."

Last week, Melua - who spent six years of her childhood in Belfast - received an honorary degree from Queen's University, Belfast.

Accepting the DLit (Mus) for services to music from the academic institution, she said: "It was a complete surprise and really unexpected to be awarded this honorary degree and I am so delighted.

"I consider Belfast a city very close to my heart and to be recognised in this way in the field of music is phenomenal."


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