The British taxman is working hard behind the scenes to close down tax management schemes for the rich and famous.
HM Revenue & Customs has already announced a renewed investigation of Jersey based tax saving scheme K2 that reportedly has TV comic Jimmy Carr as the main investor with a deposit of £3.3 million.
Now, a tax management scheme counting pop band Take That – headed by Jubilee concert organiser Gary Barlow – and other leading music industry figures.
The scheme, run by Icebreaker Management Services, allegedly has more than 1,000 investors who have paid £480 million in to 62 music industry investment projects.
HMRC is taking on the legality of the schemes at a tax tribunal hearing in November.
“We have taken firm action to protect the Exchequer from unacceptable tax loss,” a HMRC spokesman told The Times.
“We do not accept that the Icebreaker tax avoidance schemes have the tax effects their promoters claim.”
Icebreaker is fighting the HMRC claims.
“Icebreaker LLPs are all commercial businesses in which the LLP members work actively together in order to produce creative and artistic material and create taxable profits,” said a spokesman.
Meanwhile, financial firm Pinsent Masons has revealed the number of cases going before tax tribunals has surged by 20% in the past 12 months.
From Freedom of Information data, the firm reckons 11,000 cases went before the tribunal in 2011, compared with 9,000 in the year before.
Around 22,000 cases are pipelined for a hearing, which could take up to two years to clear.
Ian Hyde, partner at Pinsent Masons, said: “This is bad for the taxpayer and it looks bad for HMRC. An already difficult situation has been made much worse. Taxpayers are forced to wait years for a case to be decided, the outcome of which is often vital to their livelihoods. Even if HMRC can afford to lose some cases, many taxpayers cannot.”
