I was clueless on tax avoidance admits singer Katie Melua

Katie Melua
Katie Melua
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Chart star Katie Melua has told how 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 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.

Opening up about the furore for the first time today, she admitted it “sucks” that she has been under the spotlight for her part in it, and called for such schemes to be stopped to prevent others from being advised by experts to take part.

Closest Thing To Crazy singer Melua was on a list of figures - including celebrities, doctors and judges - who 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, 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.

“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. Seemed pretty straightforward and simple, so I signed up.”

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.”

The star said she hoped the law would be changed so that such schemes could not be presented to clients by tax experts.